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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?
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$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
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$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
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$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
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History
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History
Room Category Demand
Category Value Price
Distribution Complexity
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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%
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History
Room Category Demand
Category Value Price
Distribution Complexity
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Legacy
• Prebuilt price points
• Set value for room categories
• Partner distribution influence
Transition
• Wave Pricing
• Wave room categories
• Multi level distribution model
Systems
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Early Results
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Next Steps
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Q&A
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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