Beating The System

The capabilities of revenue management systems expand to help hotels forecast group business and rates via the Internet.

By Rebecca Oliva, Technology Editor -- HOTELS Magazine, 2/1/2003

The capabilities of revenue management systems are changing rapidly. As their popularity grows, so does their ability to work seamlessly with other hotel technology. Numerous revenue management system vendors are working with outside providers of property management systems (PMSs), sales & catering systems and central reservations systems (CRSs) to get the best results for hotels.

“The integration was a non-event for us as users, which is probably the best scenario you could ask for,” says Dennis Quinn, senior director of resort sales and marketing, Universal Orlando Resorts, Florida. Universal recently installed Minneapolis, Minnesota-based IDeaS revenue management system, which has a two-way interface with Dallas-based Pegasus’ reservation system. The link between the two technology systems was so efficient it went unnoticed at the property. Quinn says the interface allows the property to completely automate revenue management.

As with many hospitality technology vendors these days, revenue management system (RMS) providers are collaborating with other vendors. Both IDeaS and Optims, Evry, France, have teamed up with Newmarket International, Portsmouth, New Hampshire, and Daylight Software, Dover, New Hampshire, to create seamless solutions between RMSs and sales & catering systems. IDeaS and HubX, Newton, Massachusetts, have formed a partnership to provide hotels with a revenue management system that helps determine rates via Internet distribution systems. While most of these integrated systems have yet to be implemented in hotels, these and further RMS advancements are just around the corner, promising stronger, more accurate revenue management systems.

Integration For Automation
When Universal Orlando Resort first installed IDeaS e-yield Revenue Management Solution, it saw a payback almost immediately, according to Quinn. The implementation is part of Universal’s plan to centralize revenue management operations for its three properties: Portofino Bay Hotel at Universal Orlando, a Loews Hotel; Hard Rock Hotels at Universal Orlando; and the recently opened Royal Pacific Resort at Universal Orlando, a Loews Hotel.

Quinn says e-yield provides a truly automated system. “We also have the key benefit of synchronizing room availability and pricing for all of our voice, global distribution and Internet channels,” he says.

The combination of Pegasus’ RezView CRS and IDeaS allows Universal to achieve streamlined inventory and rate management. All reservations for Universal are made in the RezView CRS, which is used on an application service provider (ASP) basis. Data from the CRS is fed directly through a two-way interface to e-yield, which then updates its forecast with the latest booking information, and delivers the updated controls directly back to the CRS’ inventory and rate mechanics in RezView. Quinn says the processing time for the forecast is done within a matter of hours, usually overnight. “The main advantage is that you have information on an automated basis. Because manual forecasting is so time consuming, it really helps to be able to forecast groups quickly,” Quinn says.

Confronting The Group Rate
While revenue management systems have been making their way into hotels for the past few years, only recently have they been able to comply with group rates. That is changing as more RMS vendors seek to partner with one another.

The 510-room Shanghai JC Mandarin found the biggest benefit of the Opus 2 Revenue Technologies’, a division of MICROS, TopLine PROFIT RMS is the capacity to forecast group rates. “The feature that has been the most important to us is the ability to evaluate future group business using automated forecasts based on the pick-up trends of the city,” says Hans Hauri, general manager for Shanghai JC Mandarin. “We are now able to balance the hotel’s group and wholesale business without losing any potential revenue.”

TopLine PROFIT is a yield management system that combines forecasting, analysis and rate quotation. The system guides both transient reservations agents and group sales managers to offer rates and dates that maximize revenue for higher profits. TopLine can be interfaced with MICROS’ sales & catering system and many PMSs and CRSs. JC Mandarin plans to interface the RMS with its CRS to provide even faster rate management when guests make reservations through the Web site.

Still, even without a completed integration between the CRS and RMS, JC Mandarin already has seen a 40% increase in room revenue after one year of installing the system and an ROI after 41 days. Hauri attributes most of the success to the system’s ability to forecast both FITs and groups.

“Through the interface with the PMS, we can conduct revenue management by controlling rate hurdles in Opus,” says Juliet Xu, revenue manager, Shanghai JC Mandarin. “The PMS will adjust rooms inventory whenever rate hurdle changes occur in the Opus system. This effectively encourages our sales and front office staff to up-sell the hotel facilities by maximizing occupancy and revenue.”

One For All
While many hotels are working on system integration, Best Western Italy, based in Milan, chose a system that would benefit all of its properties while working from a central location. The Optims.Hotel V3 system offers the Italian branch the ability to perform revenue management from the headquarters in Milan while each property receives the benefits of automated revenue management.

The hotel chain chose Optims for the centralized feature for four Best Western member hotels, located in different cities and operating different PMSs. City.Optims is a complete revenue management system that includes a central data warehouse available via Oracle or Informix. The system can be linked to more than 30 PMSs and four CRSs.

Best Western Italy expects to see at least a 3% to 7% increase in revenue with the system. “The best thing we found is that the system is a big source of information for the hotels, which they did not have before,” says Francesca Pellistri, revenue manager, Best Western Italy. Pellistri says the return will vary according to market shares. “We realized the variety of information that the hotels were missing when we first implemented the system,” Pellistri says. “The information is the first benefit—and also the ability to see a mix of different forecasts so there is not only one way to see everything.”

The Optims system is located at the Best Western Italy headquarters and linked with all of the PMSs at the four locations. Pellistri says it is up to each hotel to maintain its information—they are in control of market demands. “Since they work in different markets and in different areas, they are managed one by one,” she says. From that information, Pellistri is able to generate a forecast report to each individual property.