In the past, manual-based revenue management approaches have looked at a hotel’s booking history and current activity levels to forecast demand. During periods of high demand, revenue managers would increase rates. When demand was low, they would discount them, thereby generating best-case revenue under both scenarios. However, through the COVID-19 period and beyond, forecasting, inventory controls and pricing decisions will rarely be this simple.
In a high-speed environment, manually collecting multiple data sets from disparate hotel systems and collating, evaluating and calculating data via spreadsheets is not only tedious, but also highly susceptible to mistakes and missed opportunities. Artificial intelligence (AI), combined with data analytics, enables the automation of many daily revenue management tasks.
For instance, the production of various daily reports takes more and more time given the volume of data being gathered by hotels and the need for increasingly detailed analysis. As the amount of time devoted to these ongoing reports grows, it can take away from other more important pricing decision tasks. The data analysis methods employed by AI are becoming increasingly sophisticated and more accurate. This allows AI to play a greater role in undertaking repetitive tasks and generating analysis as the basis for critical pricing decisions.
The benefits of an RMS for hoteliers
A modern revenue management system (RMS) makes a huge difference to both the top and bottom line for hoteliers. Through a series of specialised algorithms and calculations, an RMS automatically assesses hotel performance and market demand and deploys pricing decisions across the distribution ecosystem accordingly.
The objective of an RMS is not just pricing optimisation and distribution, but also surfacing BI in an actionable template, so hoteliers can identify opportunities and outliers in the market. Combined with highly visual user dashboards, an RMS enables team members across the organisation to quickly understand future and current market demand using data at both the market and hotel level—all vital to delivering and growing hotel profitability.
Advanced BI tools allow hotels to identify trends in the market and how guest demand will impact on a product, room category or segment. A sophisticated RMS not only generates prices that adapt to market changes, but it also considers the competitive landscape and a guest’s willingness to pay. An RMS scientifically monitors competitor hotels’ pricing for an equivalent room type and its impact on your hotel’s pricing to gauge how aggressively (or otherwise) to react when a competitor changes pricing. In a crisis like the COVID-19 pandemic, hoteliers can overreact with drastic price drops to compete on the remaining demand that does exist.
Automation is key to unlocking data today
Data is abundant and central to nearly every operational decision a hotel makes today. In such an environment, a hotel’s business strategy meetings should not be dictated by a standard set of traditional reports but be fluid and interactive with BI insights instantly available for reference.
BI tools that analyse enormous volumes of data, know what to look at and when those data points are important are critical. Hoteliers that embrace the benefits that BI, automated systems and advanced analytics will be able to better attract the right guest, for the right price, via the right channel and position themselves for success in an unpredictable market.
For more information on how your hotel can benefit from advanced BI tools and an automated revenue management system, please visit: www.ideas.com