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Lincoln Property Company Proves Value of Automated Price Setting
 with 4.3% Lift in Challenging Rental Market

 
Automated Lease-Rent Pricing Solution Takes Guess Work, Emotion Out of Price Setting


November 2009 – Every company is addressing the current market challenges differently; some more aggressively and successfully than others.  In late 2008, Lincoln Property Company decided to test a new price setting process to see if it could improve revenue.  Lincoln’s executives designed a scientific test of the newest multifamily housing revenue management technology and used it at eight of their communities in separate markets.  To ensure an objective evaluation, they paired test properties with similar communities in the same markets that continued to set prices with their customary process.  The results proved a definite increase in lease rents at the automated properties – in spite of the economy.
The Dakota in the Village

“Seven of eight properties using automated rate setting had better results than our control group setting rates manually,” said Scott Wilder, senior VP, property management for the Lincoln Property Company residential division.  “Our perception entering the test was that we would activate the ‘black box’ and it would do the thinking.  We were encouraged how engaged our team became; by using LRO and contributing to our weekly pricing calls, they became more focused on rate setting and the factors that drive revenue.”

Lincoln Property Company has a corporate culture of diligent pricing analysis and rate setting.  “We are good at what we do but wanted to evaluate automated multifamily revenue management software tools and test the one we thought would be the best fit,” Wilder said.  The company selected the LRO system, from The Rainmaker Group, which is widely used in the multifamily industry.
 
4.3% lift from LRO
Lincoln, which manages more than 350 conventional communities nationwide, began its six-month pilot in February 2009 with eight test communities using LRO to set rates, while staff at eight control properties continued their established price-setting process. To ensure test results were valid nationally, Lincoln selected communities in the Atlanta, Dallas, and South Florida markets.   At the pilot’s conclusion, LRO properties showed a 4.3% lift over the eight control properties.  The LRO system analyzed hundreds of historic and current economic, market, and comp-set variables, and traffic information to deliver updated rate recommendations daily.
 
“The surprise was the LRO recommendations caused our on-site and regional managers to engage more with their markets and the price-setting data and became more familiar with who their real competitors were and why they were gaining or losing leases,” said Wilder.  “Our managers do a great job of rate setting, but the automated system is more detailed and looks at many more variables than you would think of including manually.” 

Market-based pricing – minus emotion
Another surprise was how the pricing system responded to the soft market. “LRO’s analysis of market conditions, including guest traffic, revealed that significantly lowering rates was unlikely to produce a proportional increase in demand in the softening market,” said Wilder.  “We took a measured approach and accepted the systems recommendation that we lower rates in small increments.  This kept our LRO properties from deeply reducing rates unnecessarily.”

Looking forward to market recovery
“We ran our six-month pilot in a very soft market and the system helped us,” Wilder said.  “LRO was good in the down market and when the economy corrects, the real value will come in the renewal cycle.  Renewal rate setting is especially difficult where managers have relationships within their community.  LRO’s renewal price setting removes the emotion from the decision.  I expect higher revenue will be the result.”

“The transition to automated pricing is all about change management,” Wilder said.  “Shifting communities to automated pricing changes the way we do business.  LRO’s most solid benefit is that it helps our onsite people and regional managers do a better job.  The longer you use it, the better you become at optimizing rents.”  Lincoln expects to roll out the LRO revenue management system to its owned properties over the next two years and recommend revenue management to all their third party clients. 

About Lincoln Property Company
Lincoln Property Company is one of the largest, most respected, diversified real estate services firms in the U.S and the only national firm to rank as a top 25 owner of office, industrial and multi-family real estate. Lincoln serves as owner/operator or full service management provider for more than 135,000 units (including its military group) and operates 350 conventional communities.
 
About The Rainmaker Group
The Rainmaker Group is a software and services company that provides the LRO profit optimization solution that enables multifamily housing operators to maximize revenue from apartment leases.  LRO is used by more than 60 percent of the companies deploying revenue management systems in the industry and, uniquely, LRO’s lease/rent revenue optimization success has been verified by independent third party consulting firms.  For more than six years LRO has delivered optimized leasing rates to the largest operators in the industry including Archstone, Equity Residential, Post Properties, Laramar Group, Home Properties, Simpson Housing, Mid-America Apartment Communities, Carmel Partners and other leading multifamily housing companies.
 
The Rainmaker Group also provides revenue management for more than half a million units in the gaming hospitality industry.  Rainmaker implements and supports the revolution product suite, which maximizes total property profitability for operators of casino hotels and other hospitality enterprises.  The company enables clients to identify and maintain availability for their most profitable revenue sources through revenue management implementations.  The Rainmaker Group helps casino hotels increase profitability through the accurate, instantaneous ability to determine the minimum acceptable value of each guest.  This increases client profitability by securing the most profitable customers and developing more effective business processes.  Hospitality clients include Boyd Gaming, Omni Hotels, MGM MIRAGE, and Trump Entertainment Resorts.  
.
 
Contact:

The Rainmaker Group
Bruce Barfield
President
5755 North Point Parkway
Suite 77
Alpharetta, GA  30022
Phone:  678-578-5777
Email:  sales(at)letitrain.com
http://www.letitrain.com

Lincoln Property Company
R. Scott Wilder, CPM
Dallas, Texas
Phone: 214-740-4302
Email: wilder@lpsi.com
http://www.lincolnapts.com
 
Media Contact – North America
Julie Keyser-Squires, APR
Softscribe Inc.
Julie(at)softscribeinc.com
(404)256-5512
http://www.softscribeinc.com
  


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Seven Multifamily Housing Operators Tap Rainmaker LROTM Revenue Optimization System; The economy may be down, but interest in lease-rent revenue optimization system is up / July 2009

The Hard Rock Hotel & Casino Las Vegas Selects Rainmaker Group Revenue Management; Morgans Hotel Group taps Rainmaker for Total Customer Value profit optimization at its Las Vegas casino hotel / June 2009

The Rainmaker Group Showcases Profit Optimization Solution in Microsoft Booth at HITEC; Revenue management leader and Microsoft Certified Partner will give profit optimization tutorial in Microsoft Booth 674 / June 2009

Rainmaker Revenue Management Installed by William F. Harrah College of Hotel Administration at University of Nevada, Las Vegas; Nation's top gaming hotel school to incorporate Rainmaker revenue management in class instruction / June 2009

What's Hot: Total Profit Optimization. What's Not: Room Rate Optimization; Experienced gaming and hospitality companies use the Total Customer Value approach to maximize profitability for the enterprise, not just the rooms division / May 2009

Harrah's Cherokee Casino Hotel: A Winner with Total Customer Value; Property leverages revenue management software to strengthen marketing promotions, maintains leadership in Harrah's portfolio / May 2009

The Rainmaker Group Approved as Microsoft Certified Partner; Certification strengthens revenue management leader’s partnership with Microsoft / May 2009

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Windsor Communities Implements Rainmaker revolution LROTM Revenue Optimization at 10,000 Units; LRO demonstrates lease rent lift in conclusive pilot test / February 2009

Multifamily Revenue Management Leader Annie-Laurie McCulloh Joins The Rainmaker Group; McCulloh brings operations and pricing expertise to LRO provider / February 2009

Omni Hotels Advances Revenue Management Systems with Rainmaker; Two-Way Interface Between Rainmaker and Omni’s CRS Powers New System / January 2009

The Rainmaker Group, Leader in Profit Optimization Software, Opens Regional Office in Singapore; Expands Global Presence, Hires Managing Director Vivek Bhalla to Bring 'Total Customer Value' Revenue Strategy to Casino Hotels and Gaming in Asia Pacific Market / November 2008

The Rainmaker Group, Microsoft Team to Leverage Future Products for Gaming Hospitality Operators; Partnership Will Enable Operators to Extend Enterprise Data beyond Revenue Management / November 2008

Foxwoods Installs The Rainmaker Group's revolution Revenue Management System; Largest casino in North America uses Rainmaker to optimize profitability at 4 hotels with 2,221 rooms / October 2008

The Rainmaker Group 5th Annual Client Steering Committee Meeting Taps Financial Analysts for Revenue Think Tank; Wall Street analysts urge adoption of technology to drive greater revenue / October 2008

Carmel Partners Selects Rainmaker revolution LROTM Revenue Optimization Solution for 57 Communities; LRO delivers 3.55% lift in revenue billed per unit in 8 community pilot test / September 2008

Hollywood Casino Tunica Installs Rainmaker revolutionsm Revenue Management, Optimizes Rates, Occupancy; 494-room Hollywood / September 2008

Multifamily Housing Organizations Maintain Momentum; Revenue Management Strategies and Technologies Make Good Partners in Today's Economy / August 2008

Casino Hotel Operators Wield Strategies and Technology to Tame a Softening Market; Savvy revenue managers increase 'cash' customers, leverage revenue optimization technology to minimize the downturn's effect / August 2008

The Rainmaker Group Announces revolutionsm Product Suite on Microsoft Software Platform; Microsoft relationship enables flexible hosting options for Rainmaker’s profit optimization clients / June 2008

Wynn Las Vegas Implements Rainmaker revolution  Revenue Management; Rainmaker tapped by Wynn to optimize total customer value for 5-Star, 5-Diamond resort - / June 2008

Follow the Money: 10 Years of Profit Optimization Progress Pays Off for Operators; Customer service, revenue management focus in two markets a winning strategy for The Rainmaker Group and its clients / April 2008

The Rainmaker Group Welcomes Rod Collier and John W. Wallace to its Management Team; New top-level talent adds to Rainmaker's 250 years of combined profit optimization expertise in the revenue management community / March 2008

Rainmaker Transitions Post Properties' LRO Lease Optimization System to SunGard Hosting; SunGard frees Post team from system responsibilities, hosts application and database / January 2008

Rainmaker Group Leads Revenue Management Panel at GA Tech Conference; Rainmaker hosts Harrah's, MGM MIRAGE, Archstone-Smith execs for Revenue Management thought leadership event / October 2007

'Increasing Revenue' is Focus of Rainmaker Group Client Steering Committee Meeting; Multi-family executives assemble to shape future revenue optimization innovations / September 2007

Four Major Multi-Family Housing Operators Select The Rainmaker Group for Revenue Management Pilot Launch; Revenue Management specialist, Rainmaker, tapped for lease/rent rate lift programs by REITs and independents / August 2007

Mid-America Apartment Communities Installs Rainmaker revolution LRO SM Revenue Management Throughout 140 Properties; revolution LRO delivers a 3% rate increase to Mid-America in pilot test / August 2007

The Rainmaker Group and Realty DataTrust Partner to Introduce Optimized Multi-Dimensional Online Pricing for the Apartment Industry; Revolution LRO clients now able to market optimized rental rates on the Internet through VaultWare™ online leasing solution / June 2007

Trump Entertainment Resorts Installs Rainmaker Group revolutionsm Revenue Management Suite in All Atlantic City Properties; Trump uses revolution RM to optimize rates, manage increased demand for three properties and 2,900 rooms / June 2007

The Rainmaker Group Launches New Version of Multi-Family Housing Revenue Management System, revolution LRO; Revenue Management leader taps two math Ph.D.s, leverages data for more profitable business decisions by MFH operators / May 2007

The Rainmaker Group's 2007 Client Steering Committee Conference Expands 'Product Roadmap'; Revenue Management leader listens to users for product development guidance / April 2007

Casino Hotels Boost Profits with Rainmaker Group, Agilysys Tech Collaboration; Revenue Management and Property Management Systems identify profitable gamers / March 2007

The Rainmaker Group Hosts 3rd Annual Client Steering Committee Meeting; User Input to Guide Development; Revenue Management leader taps users for 'Project Roadmap,' assesses client priorities / March 2007

The Rainmaker Group Increases Staff 30%, Relocates to Larger Offices; Revenue Management leader adds business unit, expands to service growing client demand / March 2007

The Rainmaker Group Launches Revenue Management Pilots with Four Major Multi-Family Housing Operators; Rainmaker revolution LROsm system demonstrates immediate lease/rent revenue lift / January 2007

Boyd Gaming Hits 'Jackpot' With Revenue Management Strategy; Focus on guest value gives the advantage to the house / September 2006

The Rainmaker Group to Share Expertise at Revenue Management and Pricing Conference; Rainmaker Executive VP, Tom Walker, will speak at EyeforTravel Revenue Management and Pricing in Travel 2006 Conference / August 2006


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