Abstract: In a period of 15 months ORTEC has implemented an advanced Revenue Management solution for a leading provider of holiday parks. With over 150 holiday parks, 300.000+ price points need to be monitored and adjusted on a daily basis to offer their loyal and new guests the best price. The Revenue Management solution provides an all-inclusive overview and insights that allow for price adjustments based on consumer, leading to customized prices and ultimately higher revenues. The implemented solution improves traditional forecasting methods by applying machine learning methods (clustering and regression). An intelligent custom solution engine is integrated with a foolproof user interface, a proven dashboarding platform and an existing booking system. Furthermore the solution encourages man-machine interaction, where the combination of human business knowledge and automatic machine calculations leads to great decisions.
The advanced solution is descriptive (data visualization), predictive (forecasting) as well as prescriptive (optimization). The forecasting model uses statistical modeling and machine learning techniques. It detects patterns in historical booking data and applies these patterns to make forecasts, considering both historical bookings and the current bookings at hand. A Linear Programming model is used to solve the optimization problem, which determines prices that maximize total profit.
Before the introduction of this fully automated Revenue Management solution, many manual activities and analyses were required. The manual activities meant focusing on a small selection of price points, especially those points in the far future received less attention. In the new situation, all price points are optimized and, due to the numerous insights, the Revenue Managers can now quickly spot and respond to new trends.