Jair: An Overview

Jair: Yield Management

Suite

An overview

5th August 2010

True North

Yield Management

Yield Management

Introduction to Jair

Features

Using Jair

Technical

Yield Management (also known as Revenue or Inventory Management) is a technique

used to maximise the revenue a supplier brings in.

It is used in industries where there is a shelf-life on the stock, or inventory, that the

supplier provides – where once a date has passed the inventory has a greatly reduced or

zero value. This is known as “distressed” inventory.

An example of this is an empty airline seat, where once the plane has flown the seat can’t

be sold again.

The use of Yield Management was pioneered by American Airlines in the 1980s who

credited it with a revenue increase of $500 million a year (in 1998) and is also heavily used

in the hotel and other travel industries (e.g. rail travel with National Express and SNCF

being examples of Yield Management users).

Yield Management techniques usually rely on inventory that can be sold a different prices

to different segments of the market (think of a fully-flexible versus a budget airline ticket)

and it relies on the control and release of inventory based on the expected demand.

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An Example: Hotel Booking

Yield Management


Features

Using Jair

Technical

As an example imagine a medium-sized hotel in

with 100 rooms. The hotel segments its

customers and offers different rates aimed at

business customers (£100 per night) versus

leisure (£80 per night) with more flexible terms

and conditions for the more expensive rate.

The challenge for the hotel revenue manager is

to protect enough higher revenue business

bookings whilst ensuring that as few as possible

of the rooms are left empty. This is done by

limiting the availability of the leisure rate based

on the forecasted demand.

If the limit is set too high then more leisure

customers may take up rooms that could have

been sold at a higher rate. If the limit is set too

low then there may not be the demand from

business customers and the rooms will go empty.

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An Example: Hotel Booking

Yield Management


Features

Using Jair

Technical

This balancing act leads to two “big questions” for revenue managers:

“The hotel isn’t full and it’s close to the arrival date. Will I be able to fill spare capacity?”

“The hotel is full, but did I sell too quickly and miss selling at a better rate?”

All experienced revenue managers will have an intuitive understanding of how bookings come in, and will have a “feel-factor” of when they should open or close their rooms for sale. However, with less experience or less time this intuitive understanding may not yield the best results.

Luckily, if the right data is available there is a way to harness this understanding of demand and calculate how to maximise revenue. The experience of the revenue manager is channelled in to the more difficult skill of forecasting demand.

We’ll see how Jair provides this insight and has tools that help answer the big questions.

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What is Jair?

Yield Management


Features

Using Jair

Technical

Jair is a suite of applications aimed at making it easier for Yield Managers to maximise revenue by providing guided insights and both manual and automated controls of the price and availability of inventory.

Jair contains tools and algorithms that make it easier for the Yield Manager to:- Forecast demand based on historical information and growth factors- Control pricing and availability of inventory - Identify and maximise revenue opportunities from special events- Be proactively informed of unusual booking patterns and opportunities

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Jair is centred around three key concepts:

1. Understand – Provide insight in to past performance enabling accurate forecasting.

2. Optimise – Jair is built around algorithms that suggest price and availability controls that will optimise revenue

3. Automate – Pro-active alerts delivered to the Yield Manager when there is unusual booking activity and opportunities to increase revenue

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1. Understand: Provide Insight

Yield Management


Features

Using Jair

Technical

Jair’s strength is presenting complex and large datasets in an understandable and actionable way. This enables Yield Managers to quickly grasp the current situation and make the right decisions in order to maximise revenue. Some examples of graphs and table are shown below.

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Historical Demand Curves show how the

bookings arrived for a particular segment on a

day, month, or season. They drive the

forecasting algorithms and enable Yield

Managers to maximise high yielding bookings

by setting the booking limit accordingly.

Booking Pace Charts enable Yield Managers to see the current state of the bookings for a particular segment. They help answer the “big question” as to whether a particular segment is likely to fill to its capacity by comparing current bookings with similar historical periods.

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2. Optimise: Price and rate control

Yield Management


Features

Using Jair

Technical

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Jair uses pluggable algorithms to help the Yield Manager make decisions on price and availability of their inventory.

Pluggable algorithms mean greater flexibility and allow Jair to use different strategies depending on the industry, size of business, and company goals.

Jair integrates with the booking system converting booking activity in to a standardised format for fast processing even over very large data volumes.

Forecast and price optimisers compare the booking activity against similar time periods factoring in special events and growth / decline to produce a picture of the booking pace and recommendations for action.

The Yield Manager maintains full control and is able to institute or override the recommendations as she sees fit. These price or availability changes are then published to the distribution channels to help control the bookings and maximise revenue.

A full audit trail of both manual and machine recommendations is maintained. This means that Jair can measure the efficacy of a particular strategy and make recommendations for the future.

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3. Automate: Business alerts

Yield Management


Features

Using Jair

Technical

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Data insight and smart algorithmic rules are important, but it is often the exceptional circumstances where money can be made or saved – for example a special event where bookings arrive at a faster rate; or a particular date range where demand is dropping off,.

In these situations, the faster a Yield Managers can assimilate and react to the exceptional demand by altering price or availability, the greater the opportunity to either increase revenue, or limit the effect of falling demand.

Jair uses a set of pre-built and customisable rules to alert Yield Managers of these exceptional situations, and once identified allow them to actively monitor bookings on this date.

As well as being notified via the web suite, Jair supports notification through email and commonly-used social networking tools – for example a dedicated and private Twitter feed highlighting business alerts, or automated messages from Jair’s robots on Instant Messaging services.

This enables both Yield Managers and General Managers to be kept informed on potential opportunities to increase revenue without the need to be tied to their computer.

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Jair: Key features and roadmap

Yield Management


Features

Using Jair

Technical

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Feature Description When

Activity Data Loader Extracts booking activity from the reservations system, converts to a

standardised format and loads in to Jair

1.0

Dashboard The portal to Jair bringing together the latest reports and alerts 1.0

Historical Demand Curves Drillable and navigable graphs giving insight in to the shape and rate of

demand over various time periods.

1.0

Booking Pace Analyser Gives an up-to-date picture of the booking s that have come in and how

this relates to bookings over a similar historical time period (e.g. versus last

year)

1.0

Price Optimiser Recommendations for price and availability changes based on pluggable

and flexible algorithms

2.0

Price and availability

distribution

Integration with website and other distribution channels to publish new

prices.

2.0

Alerting Business rules and pro-active alerts to multiple channels (email, IM,

Twitter, etc) enabling rapid response to revenue opportunities

2.0

Competitor Intelligence Data feeds and web intelligence with competitor pricing, allowing more

sophisticated revenue strategies.

3.0

Customer intelligence Integration with web analytics solutions allowing more sophisticated

marketing and revenue strategies.

3.0

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Use Jair

Yield Management


Features

Using Jair

Technical

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The timeline below shows the planned releases of Jair

We welcome the opportunity to work with clients early in the process as it means we can make a better product.

There are also benefits for our clients who are early adopters:

• Involved in prioritising features

• Enjoy features of Jair at a discounted rate

• Become part of the Jair Steering Group and have a fast track in to requesting and suggesting new features

If you would like to be an early adopter contact either Sid, Mark, or Yannick on:

• [email protected]

• [email protected]

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How does Jair work?

Yield Management


Features

Using Jair

Technical

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Jair is designed with speed, usability, security and reliability at its heart.

It runs “in the cloud” – i.e. over the internet – on enterprise-strength infrastructure provided by Amazon Web Services.

Your data is secure – only your staff and people you grant access can see your data.

Your data is safe – we back up your data for disaster recovery at no extra charge.

Your data is instantly accessible – Amazon’s infrastructure and our usability design mean that data can be retrieved quickly and displayed in an intuitive and accessible way giving instant business insight.

Your data is available – Because Jair is accessed over the internet, you can look at your data when you want, not just when you are at your office computer.

No installation headaches – we host Jair to make sure that you can get instant access to the tools and data without having to buy servers or install software.

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Thank you

Sid Haniff

[email protected] | 07968 277 116

Mark Thomsit

[email protected] | 07801 480 820

http://www.truenorth.gb.com