ATLANTA--(BUSINESS WIRE)--Revenue Analytics, the leading consulting firm in designing visionary capabilities in Pricing and Revenue Management, today announces a paper detailing the first large-scale enterprise implementation of a significant price optimization project in the hospitality industry. The paper, authored by Dev Koushik, Director of Revenue Optimization at IHG, Dr. Jon Higbie, Managing Partner and Chief Scientist at Revenue Analytics and Craig Eister, Vice President, Revenue Management at IHG, was published in the January-February issue of Interfaces, the INFORMS Journal on the Practice of Operations Research.
The price optimization capability is integrated into IHG’s PERFORM™ Revenue Management System Platform and is deployed to more than 2,700 properties globally. Retail Price Optimization delivers a 2.7 percent increase in revenue for the retail segment and more than $300 million annually for the IHG system.
“Retail Price Optimization is based on the four pillars of price elasticity, competition, supply and demand,” says Dr. Jon Higbie, Managing Partner and Chief Scientist of Revenue Analytics. “Our partnership with IHG has been a huge success, and the methods developed to estimate price elasticity and optimize rates should inspire other organizations to optimize their pricing strategies.”
In addition to generating revenue, the price optimization project also raised the visibility of IHG’s Revenue Management (RM) group globally, resulting in the development of an enterprise-wide forecasting platform and predictive demand intelligence. “IHG is now able to better align marketing and budgeting with tactical pricing and inventory control RM process,” added Dr. Higbie.
Key findings from the paper include how to:
- Build a business case for a massive enterprise system
- Gain funding for development
- Support pricing analysis and make pricing recommendations
- Adjust forecasts and automate price execution
- Implement effective performance measurement
According to Dr. Higbie, “While the paper is specific to IHG and Hospitality, the approach of predicting demand, measuring customer price response vis-à-vis competitors and optimizing price is applicable to any industry.”
About Revenue Analytics
Revenue Analytics is the world’s leading consulting firm in designing visionary capabilities in Pricing and Revenue Management. Revenue Analytics partners with clients to create elegant solutions that deliver high impact results. The firm’s principals have successfully facilitated more than 100 previous clients uncovering over $10 billion in additional revenues. For more information, visit www.revenueanalytics.com.