...Marriot – Group Pricing Optimizer Revenue management has been a system long used by the airline industry to optimize revenue on airline routes. Marriott implemented their own revenue management One Yield system twenty years ago to optimize individual guest room rates and allocation. One Yield is used in 97 percent of Marriott’s 3,300 hotels in 70 different countries to handle over 75 million individual guest room transactions per year. Recently, Marriott decided to move from One Yield to Total Yield so its revenue management system would include all revenue generation instead of just individual guest rooms. To develop this system, Marriott created a proprietary Group Pricing Optimizer (GPO) to help hotel managers decide on what rates to give to individual, group and outside catering events. Marriott International’s One Yield revenue management system has optimized profit by utilizing demand forecast, inventory allocation, and seamless interface to the reservation system. Prior to One Yield, Marriott relied on the manual approach through historical rates. The problem with this approach is that the complexity of daily updates and rapid changes in demand over a very long booking horizon creates static rates. These rates do not reflect individual customers’ willingness to pay, do not reflect the potential for displacement, or the trade-off between a booking that might have higher value. One Yield successfully linked requested bookings with forecasted...
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...Marriott International implemented its Group Pricing Optimizer (GPO), a group pricing sys- tem that helps its sales force price hotel rooms for group customers. The system uses price-elasticity models for each statistically derived market segment to recommend an optimal rate and negotiating range. To assist the sales manager during the negotiations, GPO also displays additional data, including avail- ability of sleeping-room inventory, potential displace- ment of more valuable business, probability of the customer accepting the rate, and evaluation of alter- nate dates. In its first two years of operation, GPO has met its objectives to drive profitable revenue and improve the sales process for both the customer and the sales manager. Marriott International Marriott International, Inc., a leading hospitality com- pany with more than 3,300 hotels in nearly 70 coun- tries and territories, operates and franchises hotels under the Marriott, JW Marriott, The Ritz-Carlton, Renaissance, Residence Inn, Courtyard, TownePlace Suites, Fairfield Inn, SpringHill Suites, and Bulgari brand names. It also develops and operates vacation ownership resorts, operates Marriott Executive Apart- ments, provides furnished corporate housing through its Marriott ExecuStay division, and operates confer- ence centers. Headquartered in Bethesda, Maryland, the company has more than 140,000 employees worldwide. Marriott’s heritage can be traced to a root beer stand that J. Willard and Alice S. Marriott opened...
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