1. Wes Anderson Regional Director Revenue Management, North America InterContinental Hotels

2. Caribbean Hotel & Tourism Association Agenda The New Revenue Management Linkages to Marketing/Sales Questions

3. Revenue Management Fundamentals Price Optimization Optimize Channels of Distribution Optimal Business Mix & Yielding Product Class Opportunity

4. Revenue Management Methodology Data Consolidation and Analysis Strategy Development and Buy-in Tactical Application Measure Success (via Data Consolidation and Analysis)

5. Revenue Management Fundamentals Price Optimization Consumer Based Pricing Model Competitive Based Pricing Model Niche Pricing Model Margin Based Pricing Model

6. Consumer Based Pricing Model Pricing Elasticity of Demand –When markets are elastic, lower rates –When markets are inelastic, raise rates

7. Competitor Based Pricing Model Peg rates off of competitor’s rates Assumes you are not the market leader Risk of “Greater Fool” effect –Use a rate shopping service to ensure no anti-trust infringement

8. Niche Pricing Model You’ve got to pay my rates to keep the company I’m offering at my hotels… -Isadore Sharp, Founder of Four Seasons Hotels Risk of occupancy depletion in Elastic Markets Requires clear marketing message or positioning

9. Margin Based Pricing Model Fluctuates by Supply and Demand Assumes minimum acceptable profit level Works for mid market and luxury hotels

10. Optimizing Channels of Distribution Its about Discovery and Persuasion

11. Optimizing Channels of Distribution Demand is inherent in channels

12. Optimizing Channels of Distribution GDS Retail Internet (Expedia/Travelocity) Opaque (Priceline/Hotwire) Hotel Web Site Hotel Direct (Voice Reservation Services)

13. Optimizing Channels, GDS Discovery –Marketing in the GDS –Biasing shelf space placement Persuasion –Content and Pricing

14. Optimizing Channels, Retail Internet Discovery –Conversion Percentage –Social Media Presence –Parity Compliance / discount online forwarding –Market Manager Involvement –TravelAds Persuasion –Content and Pricing

15. Optimizing Channels, Opaque Discovery –Pricing Persuasion –Pricing and Content

16. Optimizing Channels, Hotel Web Site Discovery –Search Engine Optimization Organic vs. Pay Per Click –Measuring Effectiveness Google Analytics Persuasion –Content & Pricing

17. Optimizing Channels, Hotel Direct Discovery –Marketing –Public Relations –Sales Efforts –Affiliation with Associations Persuasion –Well Trained Staff –Staff Incentives –Promotions

18. Optimizing Business Mix Yielding, the root of Revenue Management Segmenting your business Business Mix / Channels of Distribution / Lead Time

19. Product Class Optimization Product Class - rooms priced at different levels Goal against ADR capture of Price Differential Balanced Inventory vs. Fractured Inventory

20. Linkages Between Revenue Management and Marketing Marketing/PR generates Demand Revenue Management manipulates Demand

21. Linkages Between Revenue Management and Marketing Social Media Responsibilities –Incoming (Trip Advisor) vs. – Outgoing (Facebook) Marketing owns Facebook/Twitter

22. Outgoing Social Media Marketing owns Facebook / Twitter, etc Revenue Management prices offers

23. Incoming Social Media PR or Departments owns review response Revenue Management owns increasing review volume (Optimizing Channels)