Marriott Links Two Data Streams With Revenue Management System

The whole can sometimes be greater than the sum of its parts. Marriott International Inc. found that to be true after it combined two revenue management systems into one.

Revenue data collected by Marriott has many uses, such as predicting customer needs. But two separate revenue management systems kept the hotel chain from easily analyzing revenue data for forecasting and marketing insights generated by 62 million reservations annually at 2,800 properties.

It was also expensive to operate one system for its full-service hotels and another for select-service or extended-stay facilities. And system upgrades and training typically required IT visits to hotels around the globe.

Howard Melnick, senior VP, information resources application services
Howard Melnick, senior VP, information resources application services

"We wanted to lower our cost and increase our speed to market," says Howard Melnick, senior vice president of information resources application services at Bethesda, Md.-based Marriott. The new system, known as One Yield, has accomplished that.

By combining the two systems, the need for support staff is 33% lower because only one database is used and the system requires little local IT support. Its Web and thin-client-based architecture delivers training remotely and cuts costs.

But Marriott has also improved its ability to forecast changing market conditions. The system's inventory data consolidation improves planning. The upside: Marriott estimates that One Yield delivered incremental profits of $6.7 million last year, its first full year in operation.

Marriott chose to build the system in-house because revenue management is specialized and tightly integrated with its reservation system. The IT staff used standard technologies, including a centralized J2EE architecture, IBM's WebSphere and Actuate Corp.'s reporting tool.

Marriott's decision to build a centralized system with thin-client technology at global locations puts it ahead of many others in the hospitality industry, says Rob Enderle, an independent industry analyst in San Jose. "That particular industry is not known for being aggressive on technology," he says. But that's changing as more hotels automate systems such as lighting and even supply handhelds to maintenance personnel, Enderle adds.

A critical goal for Melnick and John Whitridge, vice president of revenue management systems, was ensuring that the project aligned with the business. By combining two systems, the IT team was also merging different methods for managing and analyzing revenue.

The business side worked closely with the technical staff. The team had to decide what features to add and discard. "Everybody had to compromise a little along the way," says Whitridge. "That was one of the toughest challenges, because the ideas that came up were great ideas."

Says Melnick, "Our goal is to have scheduled releases of this into the future, get it running, prove success and then continue to build."

One Yield has been rolled out to 1,700 properties since the end of 2003 and is gradually being installed at others. It has become a proving ground for technologies, such as single sign-on, that will likely be extended to other systems.

Marriott International Inc.

Business: Marriott operates 2,600 owned or franchised hotels in more than 60 countries and employs 128,000 workers. Its 2003 sales were more than $9 billion.

Project champion: Howard Melnick

IT department: 1,200

Project payback: The hotelier’s One Yield system, developed in-house, cut IT support costs for its revenue management system by one-third and delivered incremental profits of $6.7 million in 2004.

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Copyright © 2005 IDG Communications, Inc.

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