Essay on Marriott Group Pricing Optimizer

1335 Words Apr 19th, 2011 6 Pages
Marriot – Group Pricing Optimizer

Revenue management has been a system long used by the airline industry to optimize revenue on airline routes. Marriott implemented their own revenue management One Yield system twenty years ago to optimize individual guest room rates and allocation. One Yield is used in 97 percent of Marriott’s 3,300 hotels in 70 different countries to handle over 75 million individual guest room transactions per year. Recently, Marriott decided to move from One Yield to Total Yield so its revenue management system would include all revenue generation instead of just individual guest rooms. To develop this system, Marriott created a proprietary Group Pricing Optimizer (GPO) to help hotel managers decide on what
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If Marriott collects enough information on group demand, why shouldn’t hotels be constructed specifically to attract groups? Group rates are not as high as individual rates, but some of Marriott’s 3,300 hotels will have group driven revenue that is significant. These hotels will probably be located in specific markets that attract business meetings, such as New York or Las Vegas, or in vacation destinations, such as the Bahamas.

Marriott would need to utilize the data to decide what factors bring a group to the Marriott rather than another hotel, and invest in those decisive factors. If the data showed that groups of one hundred consistently booked rooms at the Las Vegas Marriott and preferred to have some privacy then Marriott may build a more inclusive part of their hotel to attract these groups. A recreational room with a pool table, a Jacuzzi, or even a room set up with video conferencing capabilities could be included in hotel construction to give Marriott an edge over another hotel. Incorporating amenities into the construction phase is extremely important since the costs are much smaller as compared to renovation costs. Utilizing the data to build proven desired amenities into new Marriott facilities could increase group rates to levels that may be comparable to individual rates of Marriott’s low end

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