IHG Sees Room for Improvement in Hotel Revenue Management

Not every guest is equally profitable. InterContinental Hotels Group (IHG) wants to exploit that with the help of a central reservation system it debuted this year. However, the company's proposed new way of selling its rooms online will require its revenue managers to rethink how they do their jobs. Like most hotel groups, InterContinental sets its pricing around room inventory based on supply and demand. Like its peers Marriott and Hilton, the group is experimenting with a new pricing and booking process, called attribute-based booking. But the new process changes the game of revenue management. Skift has covered attribute-based booking before, but here's a quick recap: A traveler picks the things they want in a room — such as a king-size bed, extra-soft pillows, or a location on a high floor and in a quiet zone of the hotel — à la carte. Once they've selected a bundle of options, the hotel group provides a custom price. "We're heading toward the end of rates by room type," said Clodagh Brennan, senior trend analyst at research firm Foresight Factory. The exception is for online travel agencies, which will continue to get generic rates. "When a consumer can pick their room and bed type by booking direct, massive numbers of them will move to direct channels," predicted Christopher Anderson, director of the Center for Hospitality Research at Cornell University. A fe