The analytics team for Wyndham Exchange & Rentals (WER) has generated $11 million of revenue in its first year using forecasting and grid technologies. By forecasting supply and demand and assessing the value of those assets on a daily basis, they’ve been able to ensure that when their 3.7 million members trade time at their vacation properties, it’s a profitable exercise.
The team creates forecasts in two main areas for its timeshare exchange group: on the business side they’re identifying risks, for example when revenue targets are exceeding demand forecasts, and sharing that information into the business units and finance teams. The technical forecasting team is a well-oiled machine, building revenue management forecasts to be more highly automated and run much more frequently. “We run about 1.4 billion forecasts every day to generate price recommendations,” says Jeremy Terbush, VP of Global Analytics for Wyndham Exchange & Rentals. “High-performance forecasting and grid helps us accelerate those as much as possible.”
In an interview at The Premier Business Leadership Series in Las Vegas, Terbush and his team (Srinidhi Melkote and Michael Towns) shared their next near-term goal and their perspectives on Wyndham’s analytical culture.
“Our next challenge is to expand our forecasts and analysis into the rental area,” Terbush said, where they’ll face a typical challenge collecting and cleansing data from 15 different reservation systems. The bigger challenge, however, might be in learning and managing the business needs of the rental organization. Melkote explained that in the rental business, Wyndham deals with two different types of consumers, which means supporting two different types of forecasting approaches: the front end consumer (the renter) and backend consumer (the property owners).
Managing the rental side of the house means looking at shorter-term, more traditional revenue management models, whereas property owners are managed with longer-term relationships and different models. The products also vary a lot more in the rental area, so the team has to customize its approach for each type of product – like cottages, houses, and even tents.
Does the fact that the team is expanding its analytical services into new business units indicate a maturing of the analytical culture at Wyndham? Terbush and his team think so. “Using Tom Davenport’s levels of analytical maturity, we rated ourselves between a three and a four,” Terbush said, “and talking to other companies makes me more confident that we’re at that Level 4. Maybe not in every single business decision we make, but we have pockets of sophistication, like in pricing, where we’re very successful because we’re so strongly driven by analytics.”
A critical piece to their ongoing success, however, is hiring the staff that can operate comfortably between the business and IT sides of the organization. “We need to have a strong focus on the soft skills to continue to sell the concept of analytics,” Terbush said. Towns adds that that the team has created a role called an ‘engagement manager’ who can “look at a business problem and translate it into a technology solution.” That combination of skills can be hard to find, but the team finds that by hiring for solid technical skills and a desire to learn, people naturally develop a strong knowledge of the business side of the house very quickly.