WELCOME TO REVENUE MANAGEMENT

1. WELCOME TO REVENUE MANAGEMENT Executive Orientation

2. AGENDA • Revenue Management Overview • Total Hotel Pricing Philosophy/Sales Strategies • Additional Demand & Price Turndowns • Fidelio and LHW Reports • One Yield

3. Revenue Management... AN OVERVIEW TOTAL HOTEL FOCUS! Marriott International Lodging Revenue Management

4. Revenue Management is …. “Selling the right product to the right customer at the right time for the right price.” Robert G. Cross Aeronomics

5. Revenue Management is also... A COMBINATION OF PEOPLE & SYSTEMS all working toward completion of the revenue cycle

6. CREATE DEMAND MAXIMIZE REVENUE SUPERIOR SERVICE EXPERIENCE Revenue Cycle

7. MAXIMIZING REVENUE SELLING STRATEGY PRICING INVENTORY ALLOCATION How we price our product How we sell our product What we put on the shelf Revenue Cycle

8. Maximizing Revenue through Pricing Revenue Cycle How do we price our product? Using: • Rational Pricing • Total Hotel Pricing Process

9. What is Rational Pricing? • A Logical Reason exists for every rate. • Customers can be segmented according to their needs, buying behavior and willingness to pay And based on this: • We define variable, market-based pricing designed to maximize revenue and profits

10. Rational Pricing BENEFITS • Re-establish price integrity in the customer’s eyes. • Logical, consistent reason for getting a discount. • Reverse the trend of trade-down to lower rates (i.e., get travelers back to paying the benchmark/corporate rate). • Allow a larger segment of rate-sensitive customers to buy the product. • Generation - Grow market share by appealing to new customers. • Share shift - Steal from the competitors. • Make it easier for reservation agents to sell.

11. MAXIMIZING REVENUE PRICING How we price our product Revenue Cycle SELLING STRATEGY INVENTORY ALLOCATION How we sell our product What we put on the shelf

12. Any other ways to maximize revenue ? Maximizing Revenue through SELLING STRATEGY How do we sell our product? • CIRCUMSTANCE • SEQUENCE

13. Sell Strategy • Selling based on Circumstance • Weekday and Weekend or 7 days per week (based on market conditions) • Holidays • Special Events which may determine…. • How to Sequence Rate presentations • Menu Quote • Offers a set of rates to a customer. • Assumed Sale • One rate only, used for promotions or Holidays.

14. CIRCUMSTANCE High Demand “New Year’s Eve” SEQUENCE Assumed Sale Special Event Rate Also Available None CIRCUMSTANCE Normal Demand “Typical Tuesday Sellout” SEQUENCE Menu Quote Concierge/Club Corporate Also Available Special Corp Rates CIRCUMSTANCE Low Demand “Thanksgiving Week” SEQUENCE Menu Quote Holiday/ Other Discounts Also Available Special Corp Rates Concierge/Club & Corporate RATE STRUCTURE Concierge/ Club $150 Corporate Benchmark $135 Special Event $195 Special Corp $120 Holiday/ Other Discounts $100 Circumstances & Sequences

15. Occupancy Rate Desire is to Focus on REVPAR REVPAR = Rate x Occupancy

16. SAFEST MODERATE RISKIEST • Increase restrictions on lower rates • Eliminate last room availability for Special Corporate accounts • Eliminate non-producing Special Corporate accounts • Close out lower rates on peak days • Raise rates for smaller Special Corporate accounts • Raise prices on discount rates • Raise the Corporate Rate • Eliminate discount rates How Does a Property Increase REVPAR ?

17. MAXIMIZING REVENUE PRICING How we price our product Revenue Cycle SELLING STRATEGY INVENTORY ALLOCATION How we sell our product What we put on the shelf

18. Maximizing Revenue through INVENTORY ALLOCATION How Else Can Revenue Be Maximized ? How much is available at each price point? YIELD MANAGEMENT PROCESS

19. IF WE KNEW . . . . Forecasting Demand Who is coming? When will they arrive? How long will they stay? How much will they pay? When will they book? How rate sensitive are they? WE COULD MAKE MUCH BETTER INVENTORY ALLOCATION DECISIONS

20. Inventory Allocation - Tools Uses past reservations and Additional Demand to forecastdemand Arrivals Forecast - forecasts transient arrivals by room and rate category and by length-of stay. Optimizes transient revenue by determining which combination of customers will maximize revenue. Filters out low value reservations. Provides specific restriction and authorization recommendations for each room/rate category for the next 90 days. .

21. Inventory Allocation - Tools Numerous reports and graphs provide detailed information for analysis purposes. Audits future Fidelio Inventory nightly to report situations that potentially could result in lost revenue). (System Control) Alerts allow the user to set thresholds to highlight days that may need immediate attention.

22. Key to a Successful Revenue Management Effort PROCESSES PEOPLE SYSTEMS

23. Group Catering Transient Sales Team DOS/RM GM DOS, Sales Team Revenue Manager GM Sales Team Dir. F&B DOS/RM Catering Sales Mgrs GM The People – In the Past & Today

24. The People – Today & In the Future TOTAL HOTEL REVENUE MANAGEMENT Revenue Management Sales Strategy Team Property Sales, Catering & Event Management General Manager

25. The People – The Difference? • Teamwork • Communication/feedback is continuous

26. Total Hotel – The Functions Revenue Analysis Business Evaluation Inventory Management Director of Market Strategy Property Sales & Event Management - Strategy & Implementation

27. The Processes ANALYSIS CRITIQUE STRATEGY

28. The Processes FUNCTION SPACE GUEST ROOMS REVENUE MANAGEMENT REVENUE MANAGEMENT SALES EVENT MANAGEMENT RESERVATION AGENTS CUSTOMER

29. Recap... Revenue Management is... • Completion of the Revenue Cycle • Proper pricing, inventory allocation , and selling strategy • Driving RevPAR • Risk Management • Forecasting Demands • Strategic Planning

30. Thank You