Skip to main content

Carlson Hotels Optimize Cross-Property Revenue Management

Last year, Carlson Hotels Worldwide successfully solved the perennial revenue management challenge of how to make centrally-produced, technology-enabled demand forecasting relevant for widely diverse franchisee markets. That objective led management to a detailed analysis of the available revenue management applications on the market today, and the decision to implement a solution that had never been used in the hospitality industry, JDA Demand.
There were several business process factors that influenced Carlson's choice of forecasting software, but also some important technological ones. In recent years there has been global adoption of service oriented architecture (SOA), which is an enterprise platform strategy that separates system functionality into discrete business process services. This approach enables companies to lift business processes out of legacy applications and transform them into services that add value to numerous different enterprise operations. The result is that companies can reuse system processes, rather than having to build, acquire and maintain an ever-increasing number of separate point solutions.

Enterprise-wide optimization
In the case of revenue management (RM), Carlson's management identified a challenge: traditional hotel RM systems are highly data-intensive and are closely linked to the property management or central reservation systems they interface with. This benefits many hoteliers, but it also presents some limitations, as the interface requirements too often determine the functional scope for the solutions, and relegate RM as an "add-on" to the existing PMS or CRS technology. This limits the system's ability to address the needs of a broader RM organization, potentially causing hotels to miss important demand management and forecasting opportunities. It is also contrary to the SOA objective of making services reusable throughout an organization to maximize business benefits for the entire enterprise.

Management wanted an effective, freestanding forecasting solution to make information delivery less dependent on legacy PMS and CRS application interfaces. Carlson also wanted its business requirements to determine the platform and delivery. After surveying the best of breed forecasting solutions inside and outside hospitality, they implemented JDA Software Group's Demand application. JDA Demand's installed base spans hundreds of enterprises and industries all characterized by diverse supply chain processes driven by a comprehensive demand analysis. Its architecture also provides Carlson with insulation from software/hardware platform issues like upgrades, backups, platform obsolesce that plague hotel companies today.

Forecasting is too important to be relegated to a process within a RM system. Carlson has the platform to harmonize key demand management decisions, and to grow its capabilities flexibly. It is the first step toward Carlson's goal to deliver industry-leading Revenue Optimization functionality products and services that enable our operators to be as profitable as possible.

Carlson uses the Demand application to produce demand forecasting outlooks for more than 670 of its hotels on a daily basis. The Demand outlooks are a key part of Carlson's ROPES (Revenue Optimization Performance Enhancement Service) program, whose participant hotels outperform the RevPAR of the non-participant hotels by 3%.

Jim Rozell is the director of revenue optimization for Carlson Hotels Worldwide, one of the world's largest hotel companies operating five major hotel brands in more than 950 locations.
This ad will auto-close in 10 seconds