Carlson Rezidor Hotel Group Maximizes Revenue through Improved Demand Management and Price Optimization
Carlson Rezidor Hotel Group (CRHG) collaborated with JDA Software Group to use operations research to drive higher revenue for its hoteliers and to stay ahead of the competition. This highly innovative revenue optimization project, SNAP, which stands for Stay Night Automated Pricing, started with enterprise demand forecasting across 600 U.S. properties in 2007. It was followed by a large-scale network optimization solution to dynamically optimize stay night rates based on price elasticity of demand, competitor rates, remaining inventory availability, demand forecasts and business rules. Starting from the optimization prototyping results in 2008, Carlson Rezidor Hotel Group consistently measured a 2-4% revenue improvement in compliant hotels over noncompliant ones. To date, compliant hotels increased revenue by more than $16 million annually. After a successful deployment in the Americas, Carlson Rezidor Hotel Group extended the partnership with JDA to roll out SNAP globally. The worldwide revenue from the solution is anticipated to exceed $30 million annually.