Omni Hotels Reaps Revenue Increase with Manugistics and The Rainmaker Group
Powerful centralized automated revenue management solution maximizes room value while recognizing loyal customers.
(PRWEB) June 9, 2005 -- As the rebound in the hospitality industry continues,
most hotel companies -- and certainly the top tier of first-class and luxury
hotels and resorts -- are experiencing a problem every business should face: customer
demand that exceeds supply.
Omni Hotels is a case in point. “Here we
are with 40 upscale hotels and more reservation requests than we have rooms
for,” says Brad Anderson, Corporate Director of Revenue Management for the
Irving, Texas-based chain, whose typical property is an upscale hotel with
350-500 rooms. “Obviously if we have a product that can command the rates we
want, we should try to maximize revenue and profitability by making the most prudent
decisions in terms of our rates and lengths of stay.”
To that end, Omni
Hotels implemented an automated revenue management solution based on technology from
Manugistics and The Rainmaker Group. Called OmniCHARM (Centralized Hotel
Automated Revenue Management), the system enables revenue managers and sales
directors at each Omni property to work together to capitalize on the most
profitable and loyal guests amongst all of our markets.
The result:
“We’ve seen about a 3% increase in capture of the total available revenue
opportunity, defined as what we would have booked anyway plus what we could have
potentially turned away. Through better and more strategic decision-making, and
through the suggestions made by the system, we are able to capture significantly
more of that revenue,” says Anderson. “As a business asset, our revenue
management system has clearly demonstrated its value -- we have achieved a
complete return-on-investment in two years, a very aggressive timeframe in our
opinion.”
Omni Hotels teamed with The Rainmaker Group in 2003 to
facilitate implementation, ongoing product development and support of its
Manugistics’ Revenue Management Solution. Today the hotel company has a robust
production solution for forecasting future demand and allocating capacity to
ensure that rooms are available for the most valuable business. In some cases,
this means the customers who are willing to pay the highest room rates or stay
the longest; in other cases, it means customers who will spend the most on
available amenities in conjunction with a room rate. The system recognizes all
of these circumstances and forecasts the optimal result.
Specifically,
for each of Omni Hotels’ distinct customer segments, the system calculates how
much demand is being generated by each of those customer ‘buckets’ and enables a
revenue manager to filter out the undesired lengths of stay for each bucket,
based on its rate. For example, it may not be prudent for a revenue manager to
take a one-night stay at the hotel’s highest rate versus a three-night stay at a
government rate.
Says Anderson, “For any reservation request, the system
crunches numbers not just for the day of arrival, our local revenue managers
were previously doing that anyway, but it also takes into consideration the
entire length-of-stay requested. It goes out into the future and displays
reservation data for rolling 13-calendar-month
stretches.
“This is something that is clearly
impossible for our revenue managers to do manually. The system is constantly
processing hundreds of thousands of data points: every four hours for the coming
seven days, and every 24 hours from day eight to 90. This kind of analysis makes
it a truly powerful real-time revenue management tool.”
A highly
sophisticated capability of the OmniCHARM system is the application of an “extra
spend” component, based on historical data. The system estimates ‘customer
spend’ for in-room movies, mini-bar, telephone, and in the gift shop, restaurant
and bar. Having established a total revenue value for each customer, the system
then employs filters or restrictions based on that, to suggest that taking a
reservation for a lower room rate may be preferable because that customer
typically spends more on-property. The resulting estimate of total customer
value is then incorporated into the model, allowing Omni to more accurately
match customer demand to supply, and reward their valued
guests.
Integrates data from disparate sources
According to Anderson,
the system has dramatically improved the productivity and decision-making of
Omni Hotels’ revenue managers by integrating information from disparate sources.
Previously, the revenue managers were tied to their manually generated Excel
spreadsheets based largely on output from their reservation and property
management systems. Today, having worked with The Rainmaker Group to tie these
processes together and make them available in Excel format for easy
comprehension, Omni Hotels has a highly flexible solution for generating
customized reports that enable revenue managers to constantly take market
fluctuations into account in allocating rooms.
“Beyond the
dollars-and-cents benefits of our revenue management system, it is providing
value by giving us a consistent and cohesive revenue management structure across
our organization,” says Anderson. “By integrating and automating what were once
fragmented processes, we have dramatically reduced the time our revenue managers
spend gathering and inputting data, and increased the time they have for
analyzing it. The result: we have made the scope of the revenue manager’s
position more forward-thinking and strategic, and that is the greatest
productivity benefit of all.”
To learn more about Manugistics and how the
company helps clients such as Omni Hotels capture more group revenue and achieve
higher ADR, please visit Manugistics at HITEC, Booth #126, in Los Angeles,
California, June 21-23.
About Omni Hotels
Omni Hotels is a
privately-owned company headquartered in Irving, Texas, operating 40 first-class
and luxury hotels and resorts throughout the United States, Canada and Mexico.
The company's portfolio comprises 35-plus owned and managed properties, four
franchised properties and one property under development. Through an aggressive
growth strategy, Omni Hotels is steadily expanding existing properties and
entering new markets across North America, including a full-scale luxury resort
in Orlando that opened in October 2004. The primary customer focus is on the
corporate business traveler and the upscale leisure traveler. J.D. Power &
Associates rated Omni Hotels among the top three in the last four years as
“Highest in Guest Satisfaction Among Upscale Hotel Chains.”
About The
Rainmaker Group
Founded in 1998, The Rainmaker Group has a strategic alliance
with Manugistics and is a specialist in revenue management implementations.
Although the Group’s early focus was on airline related systems, Rainmaker has
since focused primarily on solutions tailored to the sophisticated complexities
of gaming and resort operations. The Rainmaker team consists of world-class
computer scientists, leading operations research experts, and consultants drawn
from the industry’s most elite and experienced practitioners. Rainmaker’s
singular combination of business expertise, customer service and technical
prowess makes them an industry leader for delivering successful solutions.
Manugistics Revenue Management Group
For more than 20 years,
Manugistics has pioneered and perfected industry leading pricing and revenue
management solutions. Manugistics is the innovator in Revenue Management --
first to market in Integrated Revenue Management, first to market in Price
Optimization, and first to market in Price Sensitive Revenue Management. Today,
industry leaders in the service-based Travel, Transportation
and Hospitality industries leverage Manugistics’ expertise to maximize their
profits on more than $100 billion in annual revenues. Manugistics clients
include Caesars, Omni Hotels, Marriott, Princess Cruise Lines, TUI (formerly
Thomson Holidays), Delta Air Lines and Continental Airlines.
About
Manugistics Group, Inc.
Clients depend on Manugistics to position them one
step ahead of demand. With Manugistics' unparalleled supply chain and revenue
management solutions, clients achieve improved forecast and inventory accuracy,
leverage industry leading pricing and yield management solutions to maximize
profits while ensuring constant supply for constantly changing demand. Its
clients include industry leaders such as AT&T, BMW, Boeing, Caesars
Entertainment, Canadian Tire, Cingular, Circuit City, Coca-Cola Bottling, Coty
International, Delta Air Lines, DHL, Diageo, Dixons, DuPont, Eurostar Ltd.,
Georgia-Pacific, Great North Eastern Railway (GNER), Harley-Davidson, Harrah's
Entertainment, H.J. Heinz, John Deere, LL Bean, Limited Brands, Kraft Foods,
Marriott, McCormick, Nestle, Nissan, RadioShack, The Scotts Company, Sears,
Sinotrans, Unilever and Wickes Building Supplies. For more information, go to www.manugistics.com.
Contact:
Ms. Sheila
Blackwell
Manugistics
301-255-5486
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http://www.manugistics.com
Media Contact:
Julie
Keyser-Squires
Softscribe Inc.
404-256-5512
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Source : http://www.prweb.com/releases/2005/6/prweb249431.htm