Carlson Hotels Selects JDA’s New Travel Price Optimizer

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 Driver

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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