A "set it and forget it" method of yield / revenue management
Published: 02 Oct 2008
By EyeforTravel.com Correspondent, Las Vegas
It was in March this year when Allotz.com had introduced its inventory distribution platform, a new technology which manages the inventory for hoteliers and online resellers.
According to Allotz.com, there is a real David and Goliath battle in the market now, with the smaller resellers trying to stay competitive and offer rates similar to the big players. In addition, accommodation providers now market and sell through their own website and the company helps them with their own website, as well as their online partners.
Craig Cooley, VP Business Development, USA, Allotz.com, one of the speakers during the inaugural session of EyeforTravel's Travel Distribution Executive Conference 2008 Conference being held in Las Vegas, said, "We are operating, indeed, in an environment of many models of operation, an evolution, one that has everyone keenly focused on managing their expenses and protecting their interests. A major part of this is the complex fee schedules, commissions, and consultation services that everyone must consider, keeping in mind that while every supplier is keen to preserve their models as they must also work to improve their products."
"In this process of evolution, what Allotz brings to the forefront is simple connectivity and with this we level the field for everyone. The small hotel group or independent hotel chain will have the same access and visibility as the "big guys". We simply connect the inventory and rates to everyone with real-time and bi-directional last room availability; we connect property information and content uniformly, one repository, one source to manage," he told EyeforTravel.com's Ritesh Gupta.
"As far as moving forward is concerned, the models will evolve and the service and marketing techniques will change to meet the demand; Allotz will be an integral part of providing the connectivity for rates, inventories and content distribution as part of this evolutionary process," he said.
The relatively young company has an extremely dynamic operative model.
"We have moved from determining the needs, wants and requirements for channel management / connectivity and room's inventory management / yielding technologies and even property "Content" for our Hospitality / Hotel industry professionals…. to developing the technology and intellectual property to support a solution; designed a comprehensive solution based on the new technology; and currently are in the process of product deployment in various regional markets while focused on the overall global market," shared Cooley.
The advent of multiple distribution channels with their own unique characteristics and costs have made the job of today's revenue manager both more challenging and interesting.
On opportunities in this context, Cooley referred to a scenario.
"Say you have a 500-room hotel with five distinct room types, you have three distinct market or "demand" seasons; within each season you have weekend rates and weekday rates; with each room type and season you have targeted discount rate types and your standard rack rate, and now you have 20 reseller channels that are all attractive for your utilisation; plus the GDS. Optimally, you would like to serve up your entire inventory and your carefully planned "market driven" rate structure of room types, seasons, standard rate discounts, promotional rate plans, contract rates and consortia to everyone… all 20 channels, perhaps even more as they may become available, and the GDS."
He continued, "If you have done the math, you soon realise that providing this information is a huge staffing expense and tactical nightmare with many pitfalls and hazards for overselling and at the same time missing revenue opportunities. This information explodes exponentially, in this example, to more than 75,000 different rates and then multiply that times 20 resellers channels to manage, or 1,500,000 rates place electronically."
"What Allotz does is take the rate model / structure and hotel property information, "content", to the level of the least amount of duplication; through current information hosting technology and connectivity with an integrated and predetermined automatic yielding capabilities component. It is truly a "set it and forget it" method of yield / revenue management."
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