EFT Amsterdam Special<br><br>The Hotel Management Group, InterContinental Hotels Group, Americas has taken series of ini

EFT Amsterdam SpecialThe Hotel Management Group, InterContinental Hotels Group, Americas has taken series of initiatives pertaining to revenue management in the last 12 months.

Published: 29 Nov 2006

EFT Amsterdam Special

The Hotel Management Group, InterContinental Hotels Group, Americas has taken series of initiatives pertaining to revenue management in the last 12 months.

These include building an Internet-based Business Intelligence platform, development of RM programme for the General Managers, Directors of RM and Directors of Sales, developing RM standards, introduction of new performance metrics and concepts, a cutting edge strategy for negotiated account management, and a revised pricing structure to make it demand based and rational, according to Apo H. Demirtas, vice president - Market Strategy, The Hotel Management Group, InterContinental Hotels Group, Americas.

Demirtas says the company is focusing on increasing shareholder and owner value by innovating the most cutting RM theories that are based on the laws of microeconomics.

Speaking to EyeforTravel.com’s Ritesh Gupta ahead of Revenue Management and Pricing in Travel Europe 2006 to be held in Amsterdam, Demirtas feels the biggest challenge facing RM is currently the lack of knowledge in microeconomics.

“RM leaders and professionals within the hotel business have generally come through the ranks significantly lacking formal education and experience in microeconomics, which defines RM,” says Demirtas. “The biggest threat, however, is their denial of this fact.”

The needs of a hotel can change by season, month, week and even by weekday vs weekend, this has to be reflected in pricing to impact customer behaviour. On what would be the key in handling this, Demirtas refers to understanding price elasticity of demand as well as price resistance.

On how RM systems can support dynamic pricing decision-making and how can the price-levels be determined automatically if forecasted prebooking pattern and price sensitivity models are in place, he says, “RM systems should be able to support dynamic pricing as long as the CRS allows. Price levels can be determined using the Microeconomic Consumption Theory.”

And how sensitive is RM systems forecast quality about frequent price adoptions in a dynamic pricing environment? How can forecast quality be ensured? “Not as sensitive as they can be! That is simply substantiated by the frequency in which the users interfere the RM systems. Forecast Quality can be ensured if the correlation between demand and leading macroeconomic indicators are closely made.”

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