“Making the most of IDS as part of your Revenue Management strategy”

TTT Best Practices Forum Hotel Distribution Associação da Hotelaria de Portugal

30 Novembro 2010 | FARO – Escola de Hotelaria e Turismo do Algarve

Pilar Sánchez Aita, RateTiger

www.ratetiger.com

FASTEN

< 1990 1990-1997 1998-2002 2003-2006 2007-2008

Web InternetWWW, NEXUS,

Mozilla

Search EnginesArchie, Gopher, Lycos, Altavista,

Inktomi, Ask Jeeves

Google, Baidumore

Yahoo search,MSN Search,

Info.com, more

Online Travel

Travelweb (PEGS), WorldRes, Travelocity,

Hotelbook (PEGS)

Expedia,,Bookings,

many more

Web 2.0 - Reviews TripadvisorHolidaycheck,

trivago and moreExplosion

(including OTA)

Meta-Search EnginesKayak, Sidestep,

TOGOL, Mobissimoand more

Explosion - specialized

(e.g. trivago)

Web 2.0 - Social CommunitiesWeb-sharing

Facebook, MySpace,YouTube, WAYN

Explosion

More browsers

Explosion of websites

MO

RE

PR

OD

UC

TBrief History of e-Commerce

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What do we know? We know the internet is becoming more and more powerful and

more of a necessity, rather than a luxury in our everyday lives.

We know that hoteliers are learning to use more Revenue Management (Yield Management) strategies.

What is Revenue Management

“ … Revenue Management is the process of understanding, anticipating and reacting to consumer behavior in order to

maximize revenue or profits… “ (Wikipedia, April 2008)

Not simply the art of being the cheapest!

The evolution of the Internet has enormous impact on Revenue Management Strategy

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“How Internet Distribution Systems impact the way hotels need to view revenue management”

What influences consumer behaviour ?

Product In hoteliers’ control Location A set parameter Price In hoteliers’ control Availability Driven by the market and the

hotelier Convenience In hoteliers’ control Impression In hoteliers’ control

Conclusion: 5 out of 6 can be influenced by the hotel

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“How Internet Distribution Systems impact the way hotels need to view Revenue Management”

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Segmentation of client mix (corporate / leisure / weekday / weekend / etc.)

Balance between current occupancy and rates

Competitiveness of rates and ranking Consider consumer benchmarking abilities Market conditions (trade shows, events) Forecast of future occupancy Consumer trends & behaviour Competition

What the Revenue Manager must consider :

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Why work with IDSs?

Greater exposure

Segregation of inventory

Lower cost per acquisition compared traditional (GDS and Voice)

You want their loyal customers

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Return on your investment...

If your Average Room Rate is 100 euros per night..……

If you decided to update 10 websites ……….

If through greater exposure, you received just ONE extra room night per month from each site you work with……..

100 x 10 x 12 = 12,000 euros per year would be generated.

It’s an easy decision to make !

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“To position or not to position…” - Parity versus maximizing opportunities at producing IDS

Hotels have the choice now...

1. Different rates at different sites

2. Keep your rate parity at all sites

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“To position or not to position…” - Parity versus maximizing opportunities at producing IDS

Parity No Parity

Uniformity at all websites Different rates @ Different sites

No confused clients Clients could be confused

Can’t optimise ratesCan optimise rates; different channels sell differently - Different countries/incomes - Different selling power of channels

No conflicts with travel websites

Hotels have more control over Revenue Management / Strategy

METASEARCH: doesn’t matter for hotels using rate parity

METASEARCH: Transparency to consumers

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Recent booking trends and the impact on revenue management  

Booking trend Impact on RM

Growth of online bookings Focus on travel websites

Growing number of travel websites Greater choice of distribution / product placement

Greater choice of distribution / product placement

More decisions to be made / more updates to be processed

More decisions to be made / more updates to be processed

More time consuming and more confusing

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Summary: Right time, right place, right price. Revenue Management in a world wide web.

Right Time – Consider:

Market conditions (trade shows, events) Level of occupancy Consumer trends & behaviour Competition

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Right Place – Research:

Global vs. national vs. regional extranet? Offline vs. online? Question: which extranets produce at the Right

Time?

Summary: Right time, right place, right price. Revenue Management in a world wide web.

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Right Price – Manage:

Segmentation of client mix (corporate / leisure / weekday / weekend / etc.)

Balance between occupancy and rates Competitiveness of rates Consider consumer benchmarking abilities

Summary: Right time, right place, right price. Revenue Management in a world wide web.

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Where is my business coming from?

Who are my competitors and how do I compare?

Which channels do I need to work with?

What should be my pricing strategy?

How or how often should I update my distribution channels?

How do I monitor results?

… Ask yourself…

Online

RT Strategy

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Market – Online Distribution Market Overview

DemandSegments

Channelsof Distribution Airline CRS (GDS) Switch Hotel CRS Hotels

Travel Website

Travel Agents

Sabre

WorldSpan

Amadeus

Galileo

Pegasus Chain CRS

RepresentationCompany

Chain Franchises

IndependentProperties

Event ManagementCompanies

Call Centers

Travel Websites

CORPORATETRAVEL

GROUPCONVENTION

LEISURETRAVEL

Hotel/MotelGroups

IndependentHotels

ResortsInns, B&B’s

RT Integration

RT

In

teg

rati

on

I-CRS

TRADITIONAL

INTERNET BASED

Who will help to manage this chaos ?

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WHO ARE WE ?

RATE TIGER – We build software for hotels (since 2001) that

Simplifies competitor analysis

Centrally manages rates and availability

Automates revenue management

Products for Hotels, Hotel-Groups / Chains, Hostels and Distribution Channels

eRevMax Inc. / Rate Tiger - Key Facts

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RateTiger Product Suite

Helping hoteliers to better manage online revenue and distribution ...

RT Strategy

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RT Strategy

Products

Benchmarking for Hotels / Groups / Travel sites

Competitor rate information on travel and hotel sites

Weekly report or online real time (both accessible at any time)

300 websites connected / 3,000 hotel sites configured

Several packages available

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RT Strategy

Products

Rate & Inventory Allocation

Manage multiple travel websites in one screen

Optional status quo (Pro version)

Currently over 250 sites

Several packages available

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RT Strategy

Products

Low cost revenue management system

Based on how hotels determine rates

Three strategies

Lowest rate guarantee available for all strategies

Additional features

RT Strategy

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… OR very simple …

Without RateTiger With RateTiger

Time consuming process?You can’t add more sites? Confused?

With RateTiger you willManage More by Managing Less

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Top 8 Tips for Effective Revenue Maximization

1. Drop Rates Carefully2. Do not ignore historical data3. Invest in technology

4. Treat IDSs as your partners5. Use effective channel partners6. Automate allocation process7. Experiment with different IDSs8. Always focus on a mutual win, and this in turn will build trust

and loyalty

ExpediaExpedia

OrbitzOrbitz

hrshrs

City.comCity.com

Country.comCountry.com

Rates & Inventory

Benchmarking

Channel Partner

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Obrigado Thank You

Pilar Sánchez AitaTel : +34 91 127 1779Fax: +34 91 547 7187E-mail: pilara@ratetiger.comWeb: www.ratetiger.com