ISHC - Annual Conference Crystal Ball Sound-byte

Revenue Management –A Discipline Coming of Age

San DiegoFriday, October 21,

2005

2

Look for these Trends

1. Rapid evolution to profit management2. Scarcity of resources while raising the bar 3. Trying to “shoe a horse on a dead run”4. RMS frenzy 5. RM audits becoming a must

3

Evolving Discipline

InventoryMgmt.

Yield Mgmt.

RevenueMgmt.

Revenue &ProfitMgmt.

4

Scarcity of Resources Coming up thru ranks hasn’t cut it Well trained DRM’s in high demand $75-$85k + 30% bonus – property level Many don’t leave the brands Tactical expertise insufficient

5

Raising the Bar Certification initiatives AHLA, HSMAI, NYU, Cornell Brands working with institutions

(Hyatt & University of Houston) More emphasis on leadership &

communication (any one can crunch numbers)

Not looking in ops – looking in sales w/ analytical skills

Executive committee member

6

Trying to Shoe a Horse on a Dead Run

0%

5%

10%

15%

20%

1980GDS

2000GDS

IDS1999

IDS2004

As % of Total Reservations

4 Fold in 20Years15 Fold in 5Years

Sources: YPBR, MSNBC, hotelnewsresource.com, TIGglobal/HSMAI

7

Growth in Online Lodging Bookings

Source: Jupiter Communications/TGI Global HSMAI

$0.6 $2.0 $3.1 $4.1 $5.2 $6.3

$15.5

$7.3

$24.0

05

10152025

'99 '00 '01 '02 '03 '04 '05 '06

As of 2001As of 2004

Billions $

8

Who’s Going to be Booking On-Line?

01020304050607080

BabyBoomersGenerationX'ersEchoBoomers

Baby Boomers - born 1947 - 1965

Generation X - born 1966 - 1977

Echo Boomers - born 1978 - 1997

Millions

Where is the future online market for your clients?

9

RMS Frenzy

Up hill battle for the RMS companies Complex markets/distribution forces hotels

hand Shorter lead time all segments Dynamic pricing all segments Dynamic inventory all segments More cost effective RMS options RMS’s will become standard “equipment” But can’t give a Ferrari to student driver

10

RM Audits Become a Must

Feasibility studies Real estate sales Brand changes Management company changes Ownership changes