Management science is the application of scientific concepts and scientific facts on different industries and researches. It is applying qualitative and quantitative researches to improve an industry.
Hotels have different values and pricing depending on various factors. Room Pricing utilizing the concepts under Management Science is one of the best application that never really run out of style. Decades past and different era of design and structural projects are established using high-tech engineering ideas and information as well as hospitability trends that make a hotel efficient and long-term.
Image and brand salience can hugely make or break a company for it can be a big risk that a company may bring. It is important to provide an optimal brand recognition in order to up its reservation and customer satisfaction. According to Castro and Custodio (2016), a hotel’s online reservation system has become a popular means for reserving hotel rooms. A hotel’s online reservation system enables hotel managers to manage the reservation process without manual efforts. Moreover, the online reservation system also improves the efficiency of the reservation process compared to booking via email or by phone. The hotel’s online reservation system also provides a direct way for hotels to monitor their revenue management (Hu & Gu, 2013). This is where Management Science take effect and becomes a valuable power to a company.
One of the key assets of Marriot is that it uses an superior technology which is the income management system for separate hotel bookings which means that the systems can be utilized to provide forecasted reports about the incoming customer demands and can even track the length of stay for each day up to 90 days in advance to have an equilibrium price rate that suits the market. This system also bring optimization on the inventory customer demand and pricing controls, makes optimal inventory distributions to locate and which hotel fit a customer’s necessity in terms of location and time, and automatically address it in their reservation system. The hotels are located geographically that are distributed along the globe to meet each customers desire place across the world. This being said, management science can help predict where is the next location needed to be built using mathematical and engineering tools that the operational tools provide. Not only that, the system takes care of the millions of transactions that happen annually, storing data and using the information for strategy plans and decision making.
Aside from the management system, technology is also used in tracking available rooms to be sold to a customer through channels such as Marriott.com, that also take care of the company’s tollfree reservation number, the hotels directly, and global distribution systems for easier records. Toll-free reservation number can be a huge help so potential guests can contact the company to spend money on their services and for effective ad campaigns or promotional vehicles (Khera, 2018). These records are defended for the outsiders and can only be accessed by the employees and managers to be used in their daily operations. One significant reason why customer value Marriot Hotel is because of their ‘Group Sales’ which also boosts half of the company’s integral revenue streams. This accumulate whenever group guests prefer to extend their stay which also in return, extends the booking process of other waiting individual guests. Their reservation system can cause negative image of inconsistency for setting price negotiation as part of the booking process, demand for blocks of rooms, and lack of demand data.
Computer solution and models made by the management science make it easier to surpass this challenge that booking process and demand data are stored and controlled in the most organized way possible. To turn things around and make an opportunity out of the challenges given by the group sales and reservations, Marriot Hotel ensure it has sufficient rooms and regulate a recommended price rate using also the technologies and systems that use statistics. These statistics are quantitative data that are processed by the operational tools of the company. It improves scheduling, accounting, man-power and daily operation of the company. One strategy is balancing the rooms to be given for group requests and taking away some for individual guests and handling the inventory of rooms for a given period whether to focus on groups or individuals whichever will bring more revenue to the company. To make things more organized in the group booking process, Marriott developed a decision support system, Group Pricing Optimizer (GPO). A hotel booking system is a complex software tool that record schedules of dates and length of stay for guests as well as the ideal payment from them. It aims that the guests may choose their rooms at the time of reservation, and more advanced systems even allow customers to select extras from room service such as wine, fruit or spa schedule and romantic dates to be placed in their room at the time of their stay.
GPO is optimized using different management science modelling techniques and tools that include simulation, forecasting, and optimization techniques, to commend an ideal price rate. Marriott International's Group Pricing Optimizer (GPO), a decision support system, provides guidance to Marriott personnel on pricing hotel rooms for group customers. GPO uses demand segmentation, price-elasticity modeling, and optimization techniques to recommend an optimal rate. In operation since late 2006, the system has improved Marriott's hotel profitability and enhanced the sales process for both sales managers and customers. (Everette et al. 2010) Through management science, Marriot hotels can replace the old system of management method and introduces new and scientific methods that can work to make the hotel as new as the other emerging ones. Over the years, Marriot Company continued to strive and improve to stay in the top. However, emerging chain of hotels and cheaper lodging are also constantly built all over the world that people tend to choose inexpensive ones to maximize their expenses on other things like travel fare and food.
Management Science is also becoming relevant to every industry that continuous updates in the system is needed to stay in track. It can also cost a whole lot as time goes by and the systems becomes more and more complex and not all business can afford its value. Most importantly, economic downturn can happen unexpectedly that it is valuable to prepare in advance for retaliation. By this, the system can largely increase in the value which is a huge expense to a company that is losing guests for the time being of economic downturn. However, the thing about management science is that it can keep up with the changes and therefore, become a much valuable asset that can forecast even the future’s stand financially using statistics. This is the value of the application of scientific strategies like pricing optimization and booking systems. Despite of the expensive expenditure related to them, the well-made systems decrease the pressure from other newly built hotel competitors in a growing industry of hotels and accommodation.
