Hotel Online  Special Report

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 Manugistics Scientist Co-Sponsors Research Paper: 
Improving Revenue Management in the 21st Century
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Manugistics teams with Georgia Institute of Technology Professor
to Create Price-Boosting Revenue Strategy Tools
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ROCKVILLE, Md. –February 21, 2006 – Manugistics Group, Inc. (NASDAQ:MANU), a leading global provider of supply chain and revenue management solutions, today announced that Manugistics Chief Scientist and Director of Operations Research Dr. Jon Higbie Ph.D., has co-authored a groundbreaking paper on Revenue Management practices for the hospitality industry in the 21st Century. Higbie’s work was created in cooperation with a number of educators at the Georgia Institute of Technology’s College of Management and several hospitality industry professionals.  

The paper, titled “A Comparison of Unconstraining Methods to Improve Revenue Management Systems,” focuses on how hotels can increase profitability by more accurately forecasting demand from third-party channels.   

“The travel industry is in a period of healthy expansion, and effective Revenue Management is the key to greater profitability,” said Higbie. “However, the increasing number of travelers using PDA’s and the Internet to book reservations is causing a problem for conventional Revenue Management strategies.”  

Until recently, call centers accounted for 70 to 80 percent of all hotel reservations. Today, that number is only about 30 percent. As hotel companies receive a growing majority of bookings from outside their own reservation offices they are unable to measure lost demand accurately thereby increasing uncertainty in price setting.

“When hotel companies have limited information on why potential customers are not converting, it is impossible to accurately forecast price sensitivity or demand,” said Higbie. “Distribution channels are rapidly evolving in the digital age. To optimize pricing, it is essential that operators have a realistic idea of the future demand from these channels; we call this ‘demand unconstraining’. Unconstrained demand is simply bookings plus denials. But without information on why customers walk away, it is difficult to know how to set rates correctly.”   

Higbie and his colleagues solved this problem by developing a set of statistical tools that let hotel companies more accurately forecast demand from various customer segments in third-party channels. Based on experience in the airline industry, the result of switching to a better unconstraining method could increase revenue 2 to 12 percent.  

The collaborative research, the first of its kind for the hospitality industry, was jointly conducted by Manugistics and the Pricing and Revenue Management Initiative at the Georgia Institute of Technology led by Dr. Mark Ferguson. 

“In the past when a booking channel sold out its allotted capacity, sales data stopped,” said Ferguson. “Together, Manugistics and Georgia Tech developed a variety of statistical tools to accurately estimate demand by channel, allowing hotel companies to better manage demand. If the tools are applied correctly, they will enable hotel operators and other travel companies to increase revenue per available room (RevPAR) and profitability.”

For more than 20 years Manugistics has helped the world’s leading hotel, resort and gaming companies improve their profits through best-of-breed demand and revenue management solutions. The Manugistics Hospitality Revenue Management Suite (HRMS) can synthesize revenue coming into a property from any channel, including a company’s global distribution services (GDS), central reservation office (CRO), or website; and all segments such as group, transient, corporate and leisure. It also factors in such multiple revenue sources as guest rooms, meeting space, food & beverage (F&B), spa, and casinos to develop true profit optimization for a total revenue picture. The Manugistics Revenue Management Suite is an integrated platform that provides forecasting, optimization, collaboration and reporting for one property or a worldwide chain.

For more information about Manugistics hospitality solutions or a copy of the white paper collaboration, “A Comparison of Unconstraining Methods to Improve Revenue Management Systems,” please visit: www.manu.com/industries/tth/collateral.aspx or contact info@manu.com.

Manugistics Revenue Management Group
Manugistics has pioneered and perfected industry leading pricing and revenue management solutions.  Today, leaders in the service-based Travel, Transportation and Hospitality industries leverage Manugistics’ expertise to maximize their profits. Manugistics clients include Caesars-Harrah’s Entertainment, Omni Hotels, Princess Cruise Lines, TUI (formerly Thomson Holidays), and Continental Airlines Cargo. 

About Manugistics Group, Inc. 
Manugistics powers the synchronized supply chain. 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 and leverage industry leading pricing and yield management solutions to maximize profits while ensuring optimum supply for constantly changing demand. Its clients include industry leaders such as Boeing, Canadian Tire, Cingular, Circuit City, Coca-Cola Bottling, Coty International, DHL, Diageo, Dixons, DuPont, Eurostar Group Ltd., Georgia-Pacific, Great North Eastern Railway (GNER), Harley-Davidson, Harrah's Entertainment, H.J. Heinz, L.L. Bean, Limited Brands, Kraft Foods, Marriott, McCormick, Nestle, RadioShack, The Scotts Company, Sears, Roebuck & Co., Sinotrans, Unilever and Wickes Building Supplies. For more information, visit our website at www.manugistics.com.

FORWARD-LOOKING STATEMENT 
This release contains forward-looking statements that involve risks and uncertainties which could cause actual results to differ materially, including, but not limited to, the following: Manugistics’ ability to generate sufficient cash flow to meet its existing debt obligations and effectively conduct its business operations; the implementation of the Company’s exit and disposal plans and other cost reduction measures to align its cost structure with its revenue; effects from recent significant changes in the Company’s organizational structure and senior management; Manugistics’ ability to motivate, hire and retain its highly skilled and qualified workforce; continued softness in the market for enterprise application software, as well as political upheaval and unrest; the Company’s ability to overcome its difficulties in sales execution; the Company’s ability to maintain its competitive place in the markets for its products and services, to keep pace with the rapid technological advances or to introduce new products or product versions that satisfy customer demand, achieve market acceptance or meet competitive challenges; and changes in our competitive environment, including industry consolidation.  More information about factors that potentially could affect Manugistics’ financial results is included in Manugistics’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended February 28, 2005 and Quarterly Report on Form 10-Q for the period ended November 30, 2005.  This information is accurate only as of the date of this release and we do not undertake any obligation to update any of the information contained herein.

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Contact:

Ms. Sheila Blackwell
Manugistics
301-255-5486
sblackwell@manu.com
http://www.manugistics.com

Media Contact:
Julie Keyser-Squires
Softscribe Inc.
404-256-5512
julie@softscribeinc.com
http://www.softscribeinc.com
 

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Also See: Top 3 Must-Dos to Boost Revenue for Hotel Franchisees / January 2006
Manugistics to Showcase Next-Generation Chain Group Pricing Technology; In the ‘Year of ADR,’ Chain Hotels Capture More Group Business; Manugistics Centralized Solution Drives Higher Daily Rate / June 2005
Manugistics Senior Executives to Address Industry Professionals at HSMAI Revenue Conference and MIT INFORMS Event / June 2005
Omni Hotels Reaps Revenue Increase with Manugistics and The Rainmaker Group / Powerful centralized automated revenue management solution maximizes room value while recognizing loyal customers / June 2005


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