Incorporating Price Elasticity, Competitive Effects Improves Pricing Decisions amid Market Complexities
LAS VEGAS--(BUSINESS WIRE)-- As revenue managers adopt more strategic roles within organizations, tactical revenue management systems fall short. The brand new solution, SAS® Revenue Management and Price Optimization Analytics, is designed specifically for hospitality, travel, sports and entertainment industries to help solve challenging pricing problems. From assessing how competitors’ prices affect demand for hotel rooms to making sure sports season-ticket holders get the best deal regardless of win/loss records to strategically dropping prices to fill theater seats, the new software from the leader in business analytics accounts for all the constraints that matter.
“SAS has redefined revenue management. By injecting new analytical techniques, using more data and leveraging faster processing power, SAS magnifies the advantage of forecasting and optimization,” said Kelly McGuire, Executive Director, Hospitality and Travel Global Practice at SAS. “This empowers companies to boost revenue lift more than is possible with traditional revenue management analytics.”
Available in the US now and worldwide in 2013, SAS Revenue Management and Price Optimization Analytics addresses competitive price effects by automatically incorporating price sensitivity of demand into forecasts. Early adopters are seeing improved competitive positioning and a sustainable revenue stream, helping them become the brand of choice among investors and stakeholders.
“SAS’ approach of analytically accounting for competitive price effects, combined with calculating price sensitivity at the segment level, represents a huge leap forward for revenue management,” said Bill Carroll, PhD., Senior Lecturer, Cornell University. “Especially with the trend in the hospitality and travel industries towards linked rates, accounting for the relationships between market segments is crucial to profitable pricing decisions. Revenue managers must understand sensitivity at this level or they’ll miss out on a huge revenue opportunity.”
In addition to providing the competitive advantages that can be achieved with customized revenue management solutions, the flexible and tailored delivery approach can also minimize change management. Companies can choose to phase in a new system or upgrade just the analytics underpinning an existing system, thus preserving current workflows and user interfaces. Off-the-shelf offerings lack such flexibility.
“We’re excited about the SAS Revenue Management and Price Optimization Analytics approach,” said Bill Nowicki, Vice President of Ticket Operations with the National Hockey League's Carolina Hurricanes. “Optimizing pricing per market segment and knowing the number of promotional tickets we can sell without revenue dilution is a huge win. Analytics cuts through fan data and noisy external variables to help determine the right business mix far better and faster than we can do manually.”
Hospitality leader MGM Resorts extends pricing edge
Under a pilot program at its Las Vegas Strip resorts, MGM Resorts International is applying pricing analytics to a revenue stream that hasn’t benefited before from such advanced technology. Despite ever-present competition, other Las Vegas entertainment options are not using analytics for pricing. With SAS Revenue Management and Price Optimization Analytics, MGM Resorts automated its approach to managing entertainment revenue and pricing for its resident events.
“Las Vegas is a dynamic market, and the demand for entertainment changes daily,” said Geoffrey Waldmiller, Executive Director of Hotel Revenue Analytics for MGM Resorts International. “With SAS Revenue Management and Price Optimization Analytics, we can make better pricing decisions earlier in the booking window. By automating the process, our entertainment revenue management team can spend more time analyzing and providing answers, rather than extracting and manipulating data.”
Today's announcement came at The Premier Business Leadership Series event in Las Vegas, a thought-leadership conference presented by SAS that brings together more than 600 senior-level attendees from the public and private sectors to share ideas on critical business issues.
SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. Through innovative solutions, SAS helps customers at more than 60,000 sites improve performance and deliver value by making better decisions faster. Since 1976 SAS has been giving customers around the world THE POWER TO KNOW®.
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