Multi-Dimensional Pricing

Marco Benvenuti - Duetto

History of Traditional Revenue Management

History of Traditional RM

• Started in Airline industry in 60s

• Adapted by Hotel industry in 80s

• Inventory Management

– Everything controlled through one rate

– Different offers/channels are opened or

closed to control inventory

3

BAR (Best Available Rate)

4

p

q Demand

Price

Promo Rate – 20% off

$160 10% off

$180

$200

5

$100

$150

$400

$200

Day 1 Day 2 Day 3 Day 4

CAPACITY

AAA

Promo Rate

10%

20%

✔

AAA

Promo Rate

10%

20%

✔

✔

✔

✖ AAA

Promo Rate

10%

20% ✖

AAA

Promo Rate

10%

20%

✔

✖

Traditional Pricing

Hurdle Rate

Ready for Modern Pricing?

7

$100

$150

$400

$200

Day 1 Day 2 Day 3 Day 4

CAPACITY

AAA

Promo Rate

10%

20%

✔

✔

AAA

Promo Rate

10%

20%

✔

✔

AAA

Promo Rate

10%

20%

AAA

Promo Rate

10%

20%

✔

✔

✔

✔

Multi-Dimensional Pricing

8

$100

$150

$400

$200

Day 1 Day 2 Day 3 Day 4

CAPACITY

Room Types

+$100 Suite

+$50 King Bed

+$0 Double Bed

+$75

9

$100

$150

$400

$200

Day 1 Day 2 Day 3 Day 4

CAPACITY

Traditional Pricing

Borderline Casino Customer

COMP

COMP

COMP

COMP

10

$100

$150

$400

$200

Day 1 Day 2 Day 3 Day 4

CAPACITY

Multi-Dimensional Pricing

Borderline Casino Customer

COMP

COMP

COMP + CASH $200

COMP + CASH $50

11

$100

$150

$400

$200

Day 1 Day 2 Day 3 Day 4

CAPACITY

Multi-Dimensional Pricing/Room Type

Borderline Casino Customer

COMP Suite

COMP Standard

$50 Suite

COMP Standard

$300 Suite

$200 Standard

$100 Suite

$50 Standard

Elizabeth P. Cambra –

Outrigger Hotels & Resorts

Pricing Journey

13

14

History

15

History

Room Category Demand

Category Value Price

Distribution Complexity

16

Historical Legacy Wave Wave

Entry Category $199 / 160% $199 / 130% $199 / 115% $199 / 100%

Partial Ocean

View

$299 / 75% $259 / 85% $239 / 95% $279 / 100%

Ocean View $449 / 55% $359 / 70% $299 / 85% $309 / 95%

17

History

Room Category Demand

Category Value Price

Distribution Complexity

18

19

Legacy

• Prebuilt price points

• Set value for room categories

• Partner distribution influence

Transition

• Wave Pricing

• Wave room categories

• Multi level distribution model

Systems

20

Early Results

21

Next Steps

22

Q&A

23

Key Takeaways

1. Perform an audit on room types and rate structures to identify

opportunities

2. Decouple yieldable discounts linked off parent rates in your

PMS & CRS and yield the discounts based off demand

factors.

3. Remove static room type modifiers and vary the prices based

off factors including demand, inventory, DOW, events,

holidays, etc.

4. Determine what is valuable to your customers and build upon

that as a cornerstone to your pricing

5. Forecast to an appropriate level for your property – NOT

always at the house level

6. Strategy is nothing without distribution