Revenue Management &

Distribution

Choice Hotels Scandinavia

Cenium AS

HostecLondon, February 18

Carl Oldsberg, Director of Revenue Management

Agenda

• Short introduction to Choice Hotels Scandinavia (CHS)

• Cooperation between CHS and Cenium AS

• Distribution Strategy

• Rate Strategy

• Using Cenium to support the strategies

• Future developments

• Food for thoughts

Hotels

Vilnius

Estonia

Lithuania

Tallinn

Latvia

Total 158 (20.528 rooms)

(162 incl projects)

Norway 70 (8.708 rooms)

Sweden 70 (8.289 rooms)

Denmark 14 (2.133 rooms)

Finland/ Baltikum

4 (398 rooms)

Brands

Total 158

Comfort Hotels 27

Quality Hotels 59

Quality Resorts 12

Clarion Collection 40

Clarion Hotels 20

Choice Hotels Scandinavia and Cenium

• Cooperation started in 2002

• Choice Hotels Scandinavia one of the owners

• Working in the same building

• Rolled out 102 hotels in between 2005-2007

• Currently 116 installation

DemandVolume

Weekdays

Mon Tue Wed Thu Fri Sat Sun

Capacity

0

Nu

mb

er of B

ookin

gs

Days to Arrival123456789101112

Average Pick-Up (Business Segment)

100% Demand

0

Nu

mb

er of B

ookin

gs

Days to Arrival123456789101112

Average Pick-Up (Leisure Segment)

100% Demand

Distribution Strategy

www.choice.no/se/dkwww.choicehotels.comwww.qualityresort.no/se

www.expedia.comwww.travelocity.comwww.hotels.comwww.hotel.dewww.bookings.net

On-LineOff-Line

Direct to the hotel

Dire

ct

Indire

ct

Call Center

GDS

Dire

ct

Indire

ct

34%

15%30%

Off-Line On-Line

15% 6%

Dire

ct

Indire

ct

83%

2%1%

Off-Line On-Line

11% 3%

Dire

ct

Indire

ct

76%

3%4%

Off-Line On-Line

13% 4%

Dire

ct

Indire

ct

60%

12%10%

Off-Line On-Line

13% 5%

2006

2009

2007

2008

Distribution Strategy

Focus areas

• Channel conversion from traditional to our own website

• Call center

• “Picking” the optimal traffic from intermediaries

• Real time rates & inventory management through our

CRS and GDS

Rate Strategy

Facts

• First hotel chain in the Nordic region to move over to

dynamic pricing

• Over 60% of our customers will go over to dynamic pricing

during 2008

• Cenium allows different rates on different days

• Already seeing results from the switch in rate structure

• Increase Revenues by 38% while the market only saw a 8

% increase

Fixed RatesRate

DaysMon Tue Wed Thu Fri Sat Sun

Rack

Agreement

City High

Hotel High

Normal

Shoulder

Low

Dynamic Rates Rate

DaysMon Tue Wed Thu Fri Sat Sun

RackCity High

Hotel High

Normal

Shoulder

Low

BAR

Dynamic Rates Rate

DaysMon Tue Wed Thu Fri Sat Sun

RackCity High

Hotel High

Normal

Shoulder

Low

BAR

Agreement Rate

Dynamic Rates Rate

DaysMon Tue Wed Thu Fri Sat Sun

RackCity High

Hotel High

Normal

Shoulder

Low

BAR

Agreement Rate

Web

Dynamic Rates Rate

DaysMon Tue Wed Thu Fri Sat Sun

RackCity High

Hotel High

Normal

Shoulder

Low

BAR

Agreement Rate

Web

Cenium as a support to our strategies

Already developed

• One way interface

• Rate query function

• Day by day pricing

• Bucket structure

• Forecast

• Multi property function

Cenium as a support to our strategies

Future development?

• Two way interface

• Optimization system

• Integrated multi property and rate query function

• Distribution hub

• Enhanced CRS functionality

Food for thoughts

Profit

Price Index

Call CenterCall CenterHotel Website

Hotel Website

Third PartyThird Party GDSGDS

Sensitivity of Hotel ASensitivity of Hotel A

Quantity

Contrib

utio

n M

arg

in

Quantity

Contrib

utio

n M

arg

in

Call CenterCall Center

Hotel Website

Hotel Website

Third PartyThird Party

GDSGDS

• Price sensitivity

• Trade relationship

• Channel Conversion

Food for thoughts

Quantity

Contrib

utio

n M

arg

in

Quantity

Contrib

utio

n M

arg

in

Call CenterCall Center

Hotel Website

Hotel Website

Third PartyThird Party

GDSGDS

Food for thoughts

Thank You!