Expansion of Strategic Yielding Capabilities for Third-Party Channels
We launched on December 11, 2017 a new functionality in One Yield version 2 (available at MR hotels), and ROS/Valhalla (available at SPG hotels) that strategically manages inventory extended to intermediaries based on revenue, cost of sale, value of business and other strategic factors (“Strategic Yielding”). We also shared an update on the performance of Strategic Yielding in May (link to memo).
Today, we would like to inform you about the expansion Strategic Yielding.
Context
A core tenet of Marriott’s Global Distribution Strategy is to build and sustain a channel portfolio that delivers long-term profitability to hotels and owners. At the foundation of this portfolio are strong direct channels that continue to grow, deliver a superior guest experience, drive customer loyalty, and drive profitability to hotels.
Marriott launched Strategic Yielding with the goal to:
- Control intermediary channel mix and drive demand from brand-agnostic customers on non-peak nights.
- Transform inventory yielding from primarily considering top-line revenue to strategically managing inventory extended to intermediaries based on a range of hotel-level data inputs, including the value of the intermediated revenue, the cost of sales, channel mix and demand trends.
- Increase profitability for hotel owners.
Performance Update
When Strategic Yielding is used (on high occupancy nights), OTA volume is replaced by other transient bookings from a variety of segments, consistent with the overall transient segment mix of the hotels. OTA room night volume for low occupancy dates has not been impacted. Here is a snapshot of other key performance metrics based on the latest results:
- YTD Direct mix is up 1.4 points
- OTA bookings (Jan 20 – Sep 03) are down 3.4% (compared to 10% YoY growth before yielding)
- OTA bookings for high occupancy nights are down 16% YTD
Over the last few months we have tested varying level of “aggressiveness” of the yielding algorithm. Results of tests support implementing more aggressive hurdle thresholds.
Expected Changes To Strategic Yielding
- Managed Hotels in the U.S., Canada and CALA? (no action required): Strategic Yielding algorithm will be updated centrally to reflect a more aggressive hurdle threshold by xx/xx/xxxx.
- Franchised Hotels in U.S., Canada and CALA? will be automatically included unless any franchised hotel wishes to opt out of this adjustment by by October 5, 2018.
Please find the changes of the Strategic Yielding algorithm change on MGS.
If you have any questions about strategic yielding capabilities, please review this memo or contact your OFS Account Executive. Additionally, should you have any questions related to Marriott’s Global Distribution Strategy or the guidelines mentioned above, please contact RMfieldsupport@marriott.com or eChannels@marriott.com.
