Cenium - Revenue Management by Choice Hotels

Slide 1: Revenue Management & Distribution Choice Hotels Scandinavia Cenium AS Hostec London, February 18 Carl Oldsberg, Director of Revenue Management

Slide 2: Agenda • Short introduction to Choice Hotels Scandinavia (CHS) • Cooperation between CHS and Cenium AS • Distribution Strategy • Rate Strategy • Using Cenium to support the strategies • Future developments • Food for thoughts

Slide 3: Hotels Total 158 (20.528 rooms) (162 incl projects) Norway 70 (8.708 rooms) Sweden 70 (8.289 rooms) Denmark 14 (2.133 rooms) Finland/ 4 (398 rooms) Baltikum Tallinn Estonia Latvia Lithuania Vilnius

Slide 4: Brands Total 158 Comfort Hotels 27 Quality Hotels 59 Quality Resorts 12 Clarion Collection 40 Clarion Hotels 20

Slide 5: Choice Hotels Scandinavia and Cenium • Cooperation started in 2002 • Choice Hotels Scandinavia one of the owners • Working in the same building • Rolled out 102 hotels in between 2005-2007 • Currently 116 installation

Slide 6: Demand Volume Capacity Mon Tue Wed Thu Fri Sat Sun Weekdays

Slide 7: Average Pick-Up (Business Segment) 100% Demand Number of Bookings 12 11 10 9 8 7 6 5 4 3 2 1 0 Days to Arrival

Slide 8: Average Pick-Up (Leisure Segment) 100% Demand Number of Bookings 12 11 10 9 8 7 6 5 4 3 2 1 0 Days to Arrival

Slide 9: Distribution Strategy 2009 Off-Line On-Line Off-Line On-Line www.choice.no/se/dk Direct to the hotel www.choicehotels.com 34% Direct Direct 30% www.qualityresort.no/se Call Center 15% www.expedia.com www.travelocity.com Indirect 2008 Indirect www.hotels.com GDS www.hotel.de www.bookings.net Off-Line On-Line 15% 6% 60% Direct 10% 12% Indirect 2007 13% 5% Off-Line On-Line 76% Direct 4% 3% 2006 Indirect Off-Line On-Line 13% 4% 83% Direct 1% 2% Indirect 11% 3%

Slide 10: Distribution Strategy Focus areas • Channel conversion from traditional to our own website • Call center • “Picking” the optimal traffic from intermediaries • Real time rates & inventory management through our CRS and GDS

Slide 11: Rate Strategy Facts • First hotel chain in the Nordic region to move over to dynamic pricing • Over 60% of our customers will go over to dynamic pricing during 2008 • Cenium allows different rates on different days • Already seeing results from the switch in rate structure • Increase Revenues by 38% while the market only saw a 8 % increase

Slide 12: Fixed Rates Rate City High Rack Hotel High Agreement Normal Shoulder Low Mon Tue Wed Thu Fri Sat Sun Days

Slide 13: Dynamic Rates Rate City High Rack Hotel High Normal Shoulder BAR Low Mon Tue Wed Thu Fri Sat Sun Days

Slide 14: Dynamic Rates Rate City High Rack Hotel High Normal Shoulder BAR Low Agreement Rate Mon Tue Wed Thu Fri Sat Sun Days

Slide 15: Dynamic Rates Rate City High Rack Hotel High Normal BAR Shoulder Agreement Low Rate Web Mon Tue Wed Thu Fri Sat Sun Days

Slide 16: Dynamic Rates Rate City High Rack Hotel High Normal BAR Shoulder Agreement Low Rate Web Mon Tue Wed Thu Fri Sat Sun Days

Slide 17: Cenium as a support to our strategies Already developed • One way interface • Rate query function • Day by day pricing • Bucket structure • Forecast • Multi property function

Slide 18: Cenium as a support to our strategies Future development? • Two way interface • Optimization system • Integrated multi property and rate query function • Distribution hub • Enhanced CRS functionality

Slide 19: Food for thoughts Sensitivity of Hotel A Profit Price Index Hotel Website Call Center Third Party GDS

Slide 20: Food for thoughts • Price sensitivity • Trade relationship • Channel Conversion Hotel Website Contribution Margin Call Center GDS Third Party Quantity

Slide 21: Food for thoughts Hotel Website Contribution Margin Call Center GDS Third Party Quantity

Slide 22: Thank You!