Cenium - Revenue Management by Choice Hotels

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Presentation by Carl Oldsberg Revenue Manager of Choice Hotels Scandanavia, at Hostec 2008 in London, where he details how Choice increased revenues by 30% using Dynamic Pricing made possible with Cenium Revenue Management.

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Cenium - Revenue Management by Choice Hotels

  1. 1. Revenue Management & Distribution Choice Hotels Scandinavia Cenium AS Hostec London, February 18 Carl Oldsberg, Director of Revenue Management
  2. 2. Agenda <ul><li>Short introduction to Choice Hotels Scandinavia (CHS) </li></ul><ul><li>Cooperation between CHS and Cenium AS </li></ul><ul><li>Distribution Strategy </li></ul><ul><li>Rate Strategy </li></ul><ul><li>Using Cenium to support the strategies </li></ul><ul><li>Future developments </li></ul><ul><li>Food for thoughts </li></ul>
  3. 3. Hotels Vilnius Estonia Lithuania Tallinn Latvia Total 158 (20.528 rooms) (162 incl projects) Norway 70 (8.708 rooms) Sweden 70 (8.289 rooms) Denmark 14 (2.133 rooms) Finland/ Baltikum 4 (398 rooms)
  4. 4. Brands Total 158 Comfort Hotels 27 Quality Hotels 59 Quality Resorts 12 Clarion Collection 40 Clarion Hotels 20
  5. 5. Choice Hotels Scandinavia and Cenium <ul><li>Cooperation started in 2002 </li></ul><ul><li>Choice Hotels Scandinavia one of the owners </li></ul><ul><li>Working in the same building </li></ul><ul><li>Rolled out 102 hotels in between 2005-2007 </li></ul><ul><li>Currently 116 installation </li></ul>
  6. 6. Demand Volume Weekdays Mon Tue Wed Thu Fri Sat Sun Capacity
  7. 7. 0 Number of Bookings Days to Arrival 1 2 3 4 5 6 7 8 9 10 11 12 Average Pick-Up (Business Segment) 100% Demand
  8. 8. 0 Number of Bookings Days to Arrival 1 2 3 4 5 6 7 8 9 10 11 12 Average Pick-Up (Leisure Segment) 100% Demand
  9. 9. Distribution Strategy 2006 2009 2007 2008
  10. 10. Distribution Strategy <ul><li>Focus areas </li></ul><ul><li>Channel conversion from traditional to our own website </li></ul><ul><li>Call center </li></ul><ul><li>“ Picking” the optimal traffic from intermediaries </li></ul><ul><li>Real time rates & inventory management through our CRS and GDS </li></ul>
  11. 11. Rate Strategy <ul><li>Facts </li></ul><ul><li>First hotel chain in the Nordic region to move over to dynamic pricing </li></ul><ul><li>Over 60% of our customers will go over to dynamic pricing during 2008 </li></ul><ul><li>Cenium allows different rates on different days </li></ul><ul><li>Already seeing results from the switch in rate structure </li></ul><ul><li>Increase Revenues by 38% while the market only saw a 8 % increase </li></ul>
  12. 12. Fixed Rates Rate Days Mon Tue Wed Thu Fri Sat Sun Rack Agreement City High Hotel High Normal Shoulder Low
  13. 13. Dynamic Rates Rate Days Mon Tue Wed Thu Fri Sat Sun Rack City High Hotel High Normal Shoulder Low BAR
  14. 14. Dynamic Rates Rate Days Mon Tue Wed Thu Fri Sat Sun Rack City High Hotel High Normal Shoulder Low BAR Agreement Rate
  15. 15. Dynamic Rates Rate Days Mon Tue Wed Thu Fri Sat Sun Rack City High Hotel High Normal Shoulder Low BAR Agreement Rate Web
  16. 16. Dynamic Rates Rate Days Mon Tue Wed Thu Fri Sat Sun Rack City High Hotel High Normal Shoulder Low BAR Agreement Rate Web
  17. 17. Cenium as a support to our strategies <ul><li>Already developed </li></ul><ul><li>One way interface </li></ul><ul><li>Rate query function </li></ul><ul><li>Day by day pricing </li></ul><ul><li>Bucket structure </li></ul><ul><li>Forecast </li></ul><ul><li>Multi property function </li></ul>
  18. 18. Cenium as a support to our strategies <ul><li>Future development? </li></ul><ul><li>Two way interface </li></ul><ul><li>Optimization system </li></ul><ul><li>Integrated multi property and rate query function </li></ul><ul><li>Distribution hub </li></ul><ul><li>Enhanced CRS functionality </li></ul>
  19. 19. Food for thoughts Sensitivity of Hotel A Profit Price Index Call Center Hotel Website Third Party GDS
  20. 20. Food for thoughts Call Center Hotel Website Third Party GDS <ul><li>Price sensitivity </li></ul><ul><li>Trade relationship </li></ul><ul><li>Channel Conversion </li></ul>
  21. 21. Food for thoughts Call Center Hotel Website Third Party GDS
  22. 22. Thank You! ?

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