EzRMS™ - SaaS Revenue Management Solutions

Ez-BUDGET™ Additional Module

Executive Summary

Ez-BUDGET™ is a Decision Support and Simulation module providing a mathematical approach to prepare and evaluate the different scenarios possible with the Sales Budget of the individual property. By using elements of the Sales Budget of the property and by giving back to the sales personnel Statistics and Recommendations, Ez-BUDGET™ is a unique asset for the coordination of Revenue / Yield Management and the sales teams.

Ez-BUDGET™ is an additional module developed by Easy (Ez) Revenue Management Solutions, a worldwide provider of state-of-the-art ASP / Internet solutions in the area of Revenue & Yield Management, and is fully compatible with EzRMS™ and the EzRMS™ Internet Product Suite.

Objectives

The main objective of the Ez-BUDGET™ Decision Support module is to estimate the daily Unconstrained Demand pattern, allowing the property to reach the objective given in the Monthly Budget.

Ez-BUDGET™ provides the following Decision Support:

  • Proposes an estimate of the daily Unconstrained Demand allowing the users to realistically reach a Monthly Budget figure,
  • Uses this estimate as a method in addition to the existing forecasting approaches of EzRMS™ (History Based and Booking Based), for daily forecasting procedures,
  • Allows to build an unlimited number of Budget scenarios and to evaluate their impact on demand ("What if" analyses),
  • Estimates yearly trend and allows to initialise the future Budget.

Ez-BUDGET™ also provides recommendations for improvements to the Pricing Structure (Rate Grid) in use at the property.

In this module, we apply the same Optimisation techniques as the one used in the EzRMS™ Core Module.

In many properties, the late initialisation of the Revenue Management Controls in the PMS / CRS leads to a lack of ability to obtain the maximum Additional Revenues possible by the use of Revenue Management techniques. Ez-BUDGET™ adds to these standard Revenue Management techniques a method capable of initialising the PMS / CRS Controls several years in advance.

Macro Forecasting

In addition to the forecasting approaches of EzRMS™ (History Based and Booking Based), Ez-BUDGET™ allows the users to produce a micro-forecast based on a global Budget scenario (or Macro-Forecast).

In the case that a Budget is defined in the PMS / CRS system, this information is automatically extracted and the Ez-BUDGET™ module is fed with this default budget scenario. On the other hand, when a specific Budget scenario is to be analysed, the
Ez-BUDGET™ User Interface allows to easily input monthly Market Segment statistics for Occupied Rooms, number of Guests per Room, Room Revenues and Extra Revenues.

Then, Ez-BUDGET™ determines the Unconstrained Daily & Monthly Budgets allowing the module to calculate the input Budget. This utility makes use of the Historical Demand Patterns and the Special Events expected for the future.

Ez-BUDGET™ uses the EzRMS™ Optimisation module in order to calculate the Constrained Budget resulting from the Unconstrained Budget.

Comparisons between the different Budget scenarios may be visualised through the unique  Ez-BUDGET™ User Interface.

In addition, Ez-BUDGET™ allows the user to initialise the future Budget of the Property. In such case, a global yearly and user validated Trend of the evolution of Unconstrained Demand at the property is calculated.

Pricing

Ez-BUDGET™ contains a Pricing module, which provides the property with recommendations of improvements to the Pricing Structure (Rate Grid) in use.

The Pricing module determines the optimal price structure to be set given the price-demand elasticity curves and given the capacity constraints of the property. These price-demand elasticity formulas are internally calculated by Ez-BUDGET™.

In this module the EzRMS™ Optimisation module is used to calculate the Constrained Budget (Occupied Rooms and Total Revenue) resulting from the Unconstrained Budget.

Due to the subsequent optimisation, a decrease of the price of a low revenue demand Rate Bucket (which is to be rejected for all high demand dates) may have a very limited impact. Similarly, the increase of price of a high revenue Rate Bucket may result in a loss in demand and could be accompanied with a creation of demand on a lower Rate Bucket through a decrease of the price in that low revenue Rate Bucket.

Recommendations for change of price levels, with their impact on revenue, are presented to the analyst through the Ez-BUDGET™ User Interface.

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