JDA Software Outlines 3 Ways Hotel Operators Can Increase Revenue and Profit Margin

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JDA expert Bill Kotrba to present on how companies can achieve long-term profitability through customer segmentation and pricing strategies at Travel Distribution Summit 2010

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"Dynamic pricing based on competitive intelligence, market and customer insight, as well as customer segmentation, can give hotel operators a competitive advantage by lowering costs, avoiding price wars, and attracting and retaining valuable customers."

(PRWEB) October 13, 2010 --The hospitality market has never been more competitive, with room supply far exceeding traveler demand. Additionally, the ability to shop for and compare room rates online has heightened traveler expectations for bargain prices. This increased price transparency means hotel operators must look closely at their existing pricing and segmentation practices or risk leaving money on the table. With high levels of competition, more dynamic pricing, decreased margins and changes in consumer behavior, hotel operators need a different approach to boost profits and support market growth.

JDA® Software Group, Inc. (NASDAQ: JDAS) will offer remedies to these challenges at Eye for Travel’s 12th Annual Travel Distribution Summit in Chicago on October 13-14, 2010. In his session People, Patterns and Prices - Segmentation Strategies To Unlock Revenue Upside in Today's Competitive Environment, Bill Kotrba, senior director of industry strategies for JDA Software’s Pricing and Revenue Management Group, will discuss how companies can uncover untapped revenue opportunities using advanced segmentation and pricing strategies that are based on travel and buying patterns.

“In today’s ever-changing environment where hotel operators are struggling to balance supply and demand, identifying additional revenue opportunities in both high- and low-demand situations is critical,” said Kotrba. “Dynamic pricing based on competitive intelligence, market and customer insight, as well as customer segmentation, can give hotel operators a competitive advantage by lowering costs, avoiding price wars, and attracting and retaining valuable customers. We are proud to be a sponsor of Eye for Travel’s annual Travel Distribution Summit and we look forward to sharing JDA’s insight as to how companies can increase profitability and identify revenue opportunities even when capacity exceeds demand.”

At the conference, JDA will outline key recommendations to help hotel operators maximize revenue opportunities, including:

  •     Transition to a Dynamic, Price-Sensitive Approach: To improve revenue on all stay nights, even during low-demand periods, hotel operators must transition to a pricing and revenue management approach that can help predict how customers will respond to changes in price. By leveraging advanced technology such as price sensitive revenue management, hotels can efficiently adapt to demand, current capacity and other market factors. This frees hotel staff to spend considerably less time on forecasting, analyzing and number-crunching and focus more on improving the customer experience and other strategic business goals.
  •     Utilize Advanced Segmentation Strategy: Up until about 10 years ago, hotel price segmentation evolved around offering different prices in different distribution channels. This was effective because comparing prices across different channels was relatively difficult and time-consuming for a customer. During high-demand periods, hotels could improve results by offering fewer rooms for sale via low-priced channels. But now the convergence of traditional distribution channels and online channels has resulted in extensive price transparency, leading to the collapse of channel-based segmentation. Consequently, hotels are now left with weak segmentation such as loosely-enforced group membership discounts, rather than distinct price points controlled by the hotels. Hotels looking to maximize their revenue-generating potential, decrease their cost-of-sale, and differentiate themselves from the competition should consider price segmentation that helps deliver utility and value to customers, such as offering discounts for booking rooms early and paying in advance.
  •     Avoid Deep Discounting: The current economic environment and overall competitive nature of the hotel industry is causing hotels to aggressively discount room rates. Desperate to keep up with or beat their competitors and reduce vacancies, hotels are engaging in competitive price wars and drastically discounting room rates in an attempt to retain market share. Deep-discounting strategies result in a profit spiral that can create huge challenges as hotels try to compete at a lower price point in the future. The key to avoiding deep discounting and profit spirals is to understand price elasticity and how customers will respond to changes in price. The most advanced tools actually take advantage of today’s instant price transparency to recommend prices that maximize revenue and profit, often preventing destructive deep discounting.

Revenue management is a crucial part of success in the travel and hospitality industry. By leveraging JDA Price Sensitive Revenue Management solutions, hotels operators can reduce the risk of decreased sales and maximize a return on room occupancy. Learn more about how JDA Pricing and Revenue Management solutions help companies in the travel, transportation, hospitality and media industries achieve real results.

About JDA Software Pricing and Revenue Management Group
JDA Pricing and Revenue Management Group, a global business unit within JDA Software, is a leading provider of Price Sensitive Revenue Management™ solutions that help companies improve profits by balancing supply and demand through innovative forecasting, pricing and revenue management. For more than 25 years, companies in the travel, transportation, hospitality and media industries have benefited from the ongoing innovation and deep domain expertise from JDA. Learn more about JDA Pricing and Revenue Management.

About JDA Software Group, Inc.
JDA® Software Group, Inc. (NASDAQ: JDAS), The Supply Chain Company®, is a leading global provider of innovative supply chain management, merchandising and pricing excellence solutions. JDA empowers more than 6,000 companies of all sizes to make optimal decisions that improve profitability and achieve real results in the discrete and process manufacturing, wholesale distribution, transportation, retail and services industries. With an integrated solutions offering that spans the entire supply chain from materials to the consumer, JDA leverages the powerful heritage and knowledge capital of acquired market leaders including i2 Technologies®, Manugistics®, E3®, Intactix® and Arthur®. JDA’s multiple service options provide customers with flexible configurations, rapid time-to-value, lower total cost of ownership and 24/7 functional and technical support and expertise. To learn more about JDA Software, please visit JDA, e-mail info@jda.com or follow @JDASoftware on Twitter.

This press release contains forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally accompanied by words such as “can,” “will,” “ensure,” “help,” “enable” and “expect” and other words with forward-looking connotations. In this press release, such forward-looking statements include, without limitation, comments that certain strategies and solutions may help hospitality companies reduce the risk of decreased sales and increase profitability. The occurrence of future events may involve a number of risks and uncertainties, including, but not limited to: (a) our solutions may not perform exactly as we anticipate and the strategies may not lead to desired results; (b) there may be implementation and integration problems associated with our solutions and the strategies; and (c) other risks detailed from time to time in the “Risk Factors” section of our filings with the Securities and Exchange Commission.

“JDA” is a trademark or registered trademark of JDA Software Group, Inc. Any trade, product or service name referenced in this document using the name “JDA” is a trademark and/or property of JDA Software Group, Inc.

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