2. WELCOME TO REVENUE MANAGEMENT Executive Orientation

3. AGENDA  Revenue Management Overview  Total Hotel Pricing Philosophy/Sales Strategies  Additional Demand & Price Turndowns  Fidelio and LHW Reports  One Yield

4. AN OVERVIEW Revenue Management... Marriott International Lodging Revenue Management TOTAL HOTEL FOCUS!

5. “ Selling the right product to the right customer at the right time for the right price.” Robert G. Cross Aeronomics Revenue Management is ….

6. A COMBINATION OF PEOPLE & SYSTEMS Revenue Management is also... all working toward completion of the revenue cycle

7. Revenue Cycle CREATE DEMAND MAXIMIZE REVENUE SUPERIOR SERVICE EXPERIENCE

8. Revenue Cycle MAXIMIZING REVENUE PRICING How we price our product SELLING STRATEGY How we sell our product INVENTORY ALLOCATION What we put on the shelf

9. Revenue Cycle Maximizing Revenue through Pricing How do we price our product? Using: Rational Pricing Total Hotel Pricing Process

10. What is Rational Pricing?  A Logical Reason exists for every rate.  Customers can be segmented according to their needs, buying behavior and willingness to pay And based on this: –We define variable, market-based pricing designed to maximize revenue and profits

11. Rational Pricing BENEFITS  Re-establish price integrity in the customer’s eyes.  Logical, consistent reason for getting a discount.  Reverse the trend of trade-down to lower rates (i.e., get travelers back to paying the benchmark/corporate rate).  Allow a larger segment of rate-sensitive customers to buy the product.  Generation - Grow market share by appealing to new customers.  Share shift - Steal from the competitors.  Make it easier for reservation agents to sell.

12. Revenue Cycle MAXIMIZING REVENUE PRICING How we price our product INVENTORY ALLOCATION What we put on the shelf SELLING STRATEGY How we sell our product

13. Any other ways to maximize revenue ? Maximizing Revenue through SELLING STRATEGY How do we sell our product? CIRCUMSTANCE SEQUENCE

14. Sell Strategy  Selling based on Circumstance –Weekday and Weekend or 7 days per week (based on market conditions) –Holidays –Special Events which may determine….  How to Sequence Rate presentations –Menu Quote Offers a set of rates to a customer. –Assumed Sale One rate only, used for promotions or Holidays.

15. Circumstances & Sequences CIRCUMSTANCE Low Demand “Thanksgiving Week” SEQUENCE Menu Quote Holiday/ Other Discounts Also Available Special Corp Rates Concierge/Club & Corporate CIRCUMSTANCE Normal Demand “Typical Tuesday Sellout” SEQUENCE Menu Quote Concierge/Club Corporate Also Available Special Corp Rates CIRCUMSTANCE High Demand “ New Year’s Eve” SEQUENCE Assumed Sale Special Event Rate Also Available None RATE STRUCTURE Concierge/ Club $150 Corporate Benchmark $135 Special Event $195 Special Corp $120 Holiday/ Other Discounts $100

16. Desire is to Focus on REVPAR REVPAR = Rate x Occupancy Rate Occupancy

17. How Does a Property Increase REVPAR ? SAFEST Increase restrictions on lower rates Eliminate last room availability for Special Corporate accounts Eliminate non- producing Special Corporate accounts MODERATE Close out lower rates on peak days Raise rates for smaller Special Corporate accounts Raise prices on discount rates RISKIEST Raise the Corporate Rate Eliminate discount rates

18. Revenue Cycle MAXIMIZING REVENUE PRICING How we price our product INVENTORY ALLOCATION What we put on the shelf SELLING STRATEGY How we sell our product

19. How Else Can Revenue Be Maximized ? Maximizing Revenue through INVENTORY ALLOCATION How much is available at each price point? YIELD MANAGEMENT PROCESS

20. Forecasting Demand IF WE KNEW.... WE COULD MAKE MUCH BETTER INVENTORY ALLOCATION DECISIONS Who is coming? When will they arrive? How long will they stay? How much will they pay? When will they book? How rate sensitive are they?

21. Inventory Allocation - Tools day of week length of stay Additional Demand reason booking source price point, rate type

22. Inventory Allocation - Tools  Uses past reservations and Additional Demand to forecast demand  Arrivals Forecast - forecasts transient arrivals by room and rate category and by length-of stay.  Optimizes transient revenue by determining which combination of customers will maximize revenue. Filters out low value reservations.  Provides specific restriction and authorization recommendations for each room/rate category for the next 90 days..

23. Inventory Allocation - Tools  Numerous reports and graphs provide detailed information for analysis purposes.  Audits future Fidelio Inventory nightly to report situations that potentially could result in lost revenue). (System Control)  Alerts allow the user to set thresholds to highlight days that may need immediate attention.

24. Key to a Successful Revenue Management Effort PEOPLE PROCESSES SYSTEMS

25. Transient DOS, Sales Team Revenue Manager GM Group Sales Team DOS/RM GM Catering Sales Team Dir. F&B DOS/RM Catering Sales Mgrs GM The People – In the Past & Today

26. The People – Today & In the Future TOTAL HOTEL REVENUE MANAGEMENT Revenue Management Sales Strategy Team Property Sales, Catering & Event Management General Manager

27. The People – The Difference? Teamwork Communication/feedback is continuous

28. Total Hotel – The Functions Director of Market Strategy Revenue Analysis Business Evaluation Inventory Management Property Sales & Event Management - Strategy & Implementation

29. The Processes ANALYSIS STRATEGY CRITIQUE

30. The Processes FUNCTION SPACE GUEST ROOMS REVENUE MANAGEMENT REVENUE MANAGEMENT SALES EVENT MANAGEMENT RESERVATION AGENTS CUSTOMER

31. Recap Recap... Revenue Management is... Completion of the Revenue Cycle Proper pricing, inventory allocation, and selling strategy Driving RevPAR Risk Management Forecasting Demands Strategic Planning

32. Thank You