Manugistics and The Rainmaker Group
Powerful Centralized Automated Revenue Management Solution
Maximizes Room Value While Recognizing Loyal Customers
|June 9, 2005 - As the rebound in the hospitality
industry continues, most hotel companies -- and certainly the top tier
of first-class and luxury hotels and resorts -- are experiencing a problem
every business should face: customer
demand that exceeds supply.
The result: "We’ve seen about a 3% increase in capture of the total available revenue opportunity, defined as what we would have booked anyway plus what we could have potentially turned away. Through better and more strategic decision-making, and through the suggestions made by the system, we are able to capture significantly more of that revenue," says Anderson. "As a business asset, our revenue management system has clearly demonstrated its value -- we have achieved a complete return-on-investment in two years, a very aggressive timeframe in our opinion."
Omni Hotels teamed with The Rainmaker Group in 2003 to facilitate implementation, ongoing product development and support of its Manugistics’ Revenue Management Solution. Today the hotel company has a robust production solution for forecasting future demand and allocating capacity to ensure that rooms are available for the most valuable business. In some cases, this means the customers who are willing to pay the highest room rates or stay the longest; in other cases, it means customers who will spend the most on available amenities in conjunction with a room rate. The system recognizes all of these circumstances and forecasts the optimal result.
Specifically, for each of Omni Hotels’ distinct customer segments, the system calculates how much demand is being generated by each of those customer ‘buckets’ and enables a revenue manager to filter out the undesired lengths of stay for each bucket, based on its rate. For example, it may not be prudent for a revenue manager to take a one-night stay at the hotel’s highest rate versus a three-night stay at a government rate.
Says Anderson, "For any reservation request, the system crunches numbers not just for the day of arrival, our local revenue managers were previously doing that anyway, but it also takes into consideration the entire length-of-stay requested. It goes out into the future and displays reservation data for rolling 13-calendar-month stretches.
"This is something that is clearly impossible for our revenue managers to do manually. The system is constantly processing hundreds of thousands of data points: every four hours for the coming seven days, and every 24 hours from day eight to 90. This kind of analysis makes it a truly powerful real-time revenue management tool."
A highly sophisticated capability of the OmniCHARM system is the application of an "extra spend" component, based on historical data. The system estimates ‘customer spend’ for in-room movies, mini-bar, telephone, and in the gift shop, restaurant and bar. Having established a total revenue value for each customer, the system then employs filters or restrictions based on that, to suggest that taking a reservation for a lower room rate may be preferable because that customer typically spends more on-property. The resulting estimate of total customer value is then incorporated into the model, allowing Omni to more accurately match customer demand to supply, and reward their valued guests.
Integrates data from disparate sources
According to Anderson, the system has dramatically improved the productivity and decision-making of Omni Hotels’ revenue managers by integrating information from disparate sources. Previously, the revenue managers were tied to their manually generated Excel spreadsheets based largely on output from their reservation and property management systems. Today, having worked with The Rainmaker Group to tie these processes together and make them available in Excel format for easy comprehension, Omni Hotels has a highly flexible solution for generating customized reports that enable revenue managers to constantly take market fluctuations into account in allocating rooms.
"Beyond the dollars-and-cents benefits of our revenue management system, it is providing value by giving us a consistent and cohesive revenue management structure across our organization," says Anderson. "By integrating and automating what were once fragmented processes, we have dramatically reduced the time our revenue managers spend gathering and inputting data, and increased the time they have for analyzing it. The result: we have made the scope of the revenue manager’s position more forward-thinking and strategic, and that is the greatest productivity benefit of all."
About Omni Hotels
Omni Hotels is a privately-owned company headquartered in Irving, Texas, operating 40 first-class and luxury hotels and resorts throughout the United States, Canada and Mexico. The company's portfolio comprises 35-plus owned and managed properties, four franchised properties and one property under development. Through an aggressive growth strategy, Omni Hotels is steadily expanding existing properties and entering new markets across North America, including a full-scale luxury resort in Orlando that opened in October 2004. The primary customer focus is on the corporate business traveler and the upscale leisure traveler. J.D. Power & Associates rated Omni Hotels among the top three in the last four years as "Highest in Guest Satisfaction Among Upscale Hotel Chains."
About The Rainmaker Group
Founded in 1998, The Rainmaker Group has a strategic alliance with Manugistics and is a specialist in revenue management implementations. Although the Group’s early focus was on airline related systems, Rainmaker has since focused primarily on solutions tailored to the sophisticated complexities of gaming and resort operations. The Rainmaker team consists of world-class computer scientists, leading operations research experts, and consultants drawn from the industry’s most elite and experienced practitioners. Rainmaker’s singular combination of business expertise, customer service and technical prowess makes them an industry leader for delivering successful solutions.
Manugistics Revenue Management Group
For more than 20 years, Manugistics has pioneered and perfected industry leading pricing and revenue management solutions. Manugistics is the innovator in Revenue Management -- first to market in Integrated Revenue Management, first to market in Price Optimization, and first to market in Price Sensitive Revenue Management. Today, industry leaders in the service-based Travel, Transportation and Hospitality industries leverage Manugistics’ expertise to maximize their profits on more than $100 billion in annual revenues. Manugistics clients include Caesars, Omni Hotels, Marriott, Princess Cruise Lines, TUI (formerly Thomson Holidays), Delta Air Lines and Continental Airlines.
About Manugistics Group, Inc.
Clients depend on Manugistics to position them one step ahead of demand. With Manugistics' unparalleled supply chain and revenue management solutions, clients achieve improved forecast and inventory accuracy, leverage industry leading pricing and yield management solutions to maximize profits while ensuring constant supply for constantly changing demand. Its clients include industry leaders such as AT&T, BMW, Boeing, Caesars Entertainment, Canadian Tire, Cingular, Circuit City, Coca-Cola Bottling, Coty International, Delta Air Lines, DHL, Diageo, Dixons, DuPont, Eurostar Ltd., Georgia-Pacific, Great North Eastern Railway (GNER), Harley-Davidson, Harrah's Entertainment, H.J. Heinz, John Deere, LL Bean, Limited Brands, Kraft Foods, Marriott, McCormick, Nestle, Nissan, RadioShack, The Scotts Company, Sears, Sinotrans, Unilever and Wickes Building Supplies. For more information, go to www.manugistics.com.