History and Future of the Implementation of Yield Management in the Vacation Rental Industry.

1. The History and Future of Yield Management Amber (Leto) Mayer Chief Operating Officer V12 on the Move 2009 – Gulf Shores, AL

3. On January 17, 1985 , American Airlines launched Ultimate Super Saver fares in an effort to compete with low cost carrier PEOPLExpress . Donald Burr, the CEO of PeopleExpress, is quoted in the book "Revenue management" by Bob Cross saying "We were a vibrant, profitable company from 1981 to 1985, and then we tipped right over into losing $50 million a month...We had been profitable from the day we started until American came at us with Ultimate Super Savers." The Revenue management systems developed at American Airlines were recognized by the Edelman Prize committee of INFORMS for contributing $1.4 billion in a three year period at the airline. Notable was implementation of revenue management at National Car Rental. In 1993, General Motors Corporation was forced to take a $744 million charge against earnings related to its ownership of National Car Rental Systems. In response, National's program expanded the definition of Revenue management to include capacity management , pricing and reservations control. As a result of this program, General Motors was able to sell National Car Rental Systems for an estimated $1.2 billion. NBC credits its Yield Management system with $200 million in improved ad sales from 1996 to 2000 Target Pricing initiative at UPS . Dynamic pricing based initiative based on proximity of shipment and type to needed arrival date. Revenue management at Texas Children's Hospital. Costs of medical procedures based on necessity/timing/staffing. Various Implementation Notable Failures: Coca Cola – tried to implement Yield Management in Vending Machines Amazon.com – bug in the software, consumers upset over price changes for online purchases based on availability and popularity.

4. Growth of Air Travel 1978 Deregulation 1964 SABRE Completed 15% Average Growth 5 – 6% Average Growth

6. The Death of Airline Yield Management Orbitz Price Assurance – Auto Refunds ***What do you think their goal is with this new campaign?

7. Yield Management Life Cycle Airline Model

9. Yield Management Life Cycle Vacation Rental Model

15. 20 units 50% occ. EQUALS 10 occupied units *assumes 60% repeat guest rate 6 RPG $200/nt 4 Traditionals $175/nt Total Night Revenue: $1,900.00 20 units 60% occ. EQUALS 12 occupied units 6 RPG $200/nt 4 Traditionals $180/nt 2 Converts $170/nt 15% discount Total Night Revenue: $2,260.00 20 units 70% occ. EQUALS 14 occupied units 6 RPG $200/nt 4 Traditionals $180/nt 4 Converts $160/nt 20% discount Total Night Revenue: $2,560.00 20 units 80% occ. EQUALS 16 occupied units 6 RPG $200/nt 4 Traditionals $180/nt 6 Converts $150/nt 25% discount Total Night Revenue: $2,820.00

18. Factoids Provided by Steve Reich at LeisureLink 1. Percentage of Bookings made within 60 days of arrival --80%+ 2. Last month, 55% of our bookings had some sort of discount associated with them, reflecting the fact that consumers are looking for bargains. Most of these promotions carry at least a 25% discount. What converts a Hotel Guest to a Vacation Rental Guest? “ Hotel travelers are creatures of habit—they shop mainstream travel sites like Orbitz and Travelocity because they are comfortable with the experience. If you want to capture them, you have to be in the mainstream channels. Once you are visible, the core VR value proposition is very compelling. Vacation rentals offer a terrific value proposition for families and small groups—very low per person costs relative to a hotel. But that’s only part of the story. They also offer intimacy—an opportunity for families to gather in a living room or kitchen and simply be together. The cost per person catches their attention, but it’s the additional space that closes the deal. Make certain you have professional quality photos that emphasize these features in your properties. The consumer will not understand the differences if they can’t see them.” Steve Reich - LeisureLink

20. Reaching a Broader Audience must be achieved through Travel Sites/Media that has a larger Consumer Audience than your own.

22. Contact Information Amber (Leto) Mayer [email_address] [email_address] www.TravelStorm.net 850-499-5504 Facebook: TravelStorm Twitter: Amber Leto LinkedIn: Amber Mayer