Carlson Hotels has selected JDA Software Group’s
new Travel Price Optimizer to provide daily pricing decisions for more
than 700 properties in the United States and Asia Pacific.
JDA’s new Travel Price Optimizer dynamically
optimizes prices based on competitive rates, capacity constraints,
local market demand, and economic and company factors.
Paula Winkler, executive vice president,
operational support service and chief information officer for
Carlson Hotels Worldwide said, “Two years ago, we embarked on a
process of redefining revenue optimization for our hoteliers. Our
research showed that the capabilities offered by established
revenue management systems were no longer relevant to our hotels
or the industry. We worked with JDA to develop the Carlson Hotels
Stay Night Automated Pricing (SNAP) process. While traditional
Revenue Management focuses on restricting the availability of
discount products, the SNAP process optimizes pricing in order to
maximize revenue through demand forecasting. This is a completely
different strategy and with JDA’s new solution we will be able to
address this business challenge for our hotels.”
“Carlson Hotels Worldwide’s strategy is to
become the first hotel group to make the paradigm shift from
traditional Revenue Management to true price optimization,” said
Andy Archer, JDA group vice president. “We are seeing this change
elsewhere in the travel industry, and while there have been
efforts to join pricing and Revenue Management in hospitality, the
Carlson Hotels SNAP process truly reinvents the discipline.”
Pricing is the Biggest
SNAP is designed to address three major
shortcomings Carlson Hotels identified in the current breed of
Revenue Management systems:
- Traditional Revenue Management systems depend
too heavily on busy nights for their benefits. Carlson Hotels
wanted to help its hotels make profitable pricing decisions on all
stay nights, not just the busy ones.
- Carlson Hotels trains its hotels to understand
their markets and their competitors’ prices. Traditional Revenue
Management systems have too little insight into competitor pricing
– SNAP puts competitor data at the heart of its forecasting and
price recommendation process.
- Carlson Hotels saw an opportunity to reduce
the workload for end users significantly. To do this, it partnered
with JDA to design a new business process in which JDA handles
more complexity, so that the end-user process is simpler.
Archer said, “This marks the latest innovation
in JDA’s highly successful relationship with Carlson Hotels, which
began in 2007 with the estate-wide implementation of JDA Demand,
the leading forecasting solution used by hundreds of enterprises
across multiple industries. The creative leadership at Carlson
Hotels helped us develop and deploy a more effective pricing
technology in the hospitality industry and drive significant
revenue improvement for the company’s hotels.”
A good example of this is JDA’s innovative
Market Reference Price algorithm, which was designed
collaboratively between JDA and Carlson Hotels and is now the
subject of a patent pending.
Travel Price Optimizer is the latest addition to
JDA’s family of Price Sensitive Revenue Management solutions.
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