Profit push persuades Haven Holidays to automate pricing

Hemmed in by space and price constraints and rising customer expectations, Haven Holidays, the UK's biggest supplier of caravan holidays, is automating its pricing operation to boost profitability by improving occupancy at the best price.

Hemmed in by space and price constraints and rising customer expectations, Haven Holidays, the UK's biggest supplier of caravan holidays, is automating its pricing operation to boost profitability by improving occupancy at the best price.

"An increase in turnover of 2% will have a significant impact on our profitability provided we can hold down our costs," said Neil Davies, head of commercial operations for the company.

Haven Holidays is part of the Bourne Leisure group, which includes Warner Hotels and Butlin's, the iconic British holiday destination brand. Haven owns and runs 35 caravan parks around Britain, and sells about 600,000 individual holidays worth around £130m a year.

"Year-round occupancy is about 90%, and we are full during the main school holidays," said Davies. However, he said, customers now want more space to themselves, landscaped views and more upmarket entertainment facilities. This is increasing pressure on the availability of the pitches it has to sell to holidaymakers.

"This means we do not have much scope for increasing our margins by selling more, so we are investing millions in developing new pitches on the parks and upgrading our caravan stock so that we can charge more for the extra value we provide."

However, Haven can also rent out caravans owned by approximately 5,000 private individuals. But it must share revenue with the owners, and administration costs are higher so margins are lower.

Haven's four revenue managers are getting computerised help in the form an automated revenue management solution from JDA. The firm is currently populating the new system with data on the 35 parks, covering a 34 week season, for all 40 grades of accommodation, which includes caravans, apartments and chalets.

Haven expects the new system automate more than 60% of its pricing operation. Even so, Davies was careful to manage expectations. "We are effectively putting everything into a black box, so we will be watching and comparing its recommendations very carefully with what experienced revenue managers would do under the same circumstance," he said.

These recommendations will support Haven's different sales channels. These include call centres, websites and travel agencies, in fact any medium that could generate a sale, Davies said.

The first prices offered will be those that are most profitable for Haven, given the customer's preferences. Where these are not met exactly, staff will be prompted to up-sell the client, alternatively to offer a cheaper alternative rather than lose the sale.

"The parameters we are putting into the system reflect the current business," Davies said. "If the business changes, we will have to reconfigure it. That really requires a partnership arrangement with our suppliers, and was one of the reasons we picked JDA," Davies said. He expects the new software to go live in February 2008.




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