The sheer volume and complexity of data that hotels generate and must analyse today to make accurate business decisions is overwhelming.

Revenue managers working without an automated Revenue Management System (RMS) may find themselves at a competitive disadvantage, risk taking the wrong business for the wrong price, and costing their property revenue and profit.

Forward-looking predictive analytics combined with Artificial Intelligence (AI), when embedded in today's advanced revenue management platforms, can help hoteliers uncover emerging trends and better identify revenue opportunities to support hotel business growth.

Managing inventory with AI

A key focus of revenue management is optimising revenue and profit by effectively managing and pricing inventory. This inventory includes hotel rooms, meeting space, restaurants and other entertainment areas. Revenue managers typically look for opportunities to grow revenue on high-demand dates while maximising occupancy on low-demand days.

In this case, an AI powered RMS can automatically make recommendations and select the revenue strategies applicable to different market segments.

While hotels have managed inventory through manual controls for decades, today’s RMS incorporate user-defined configurations that automate strategies to not only improve profits, but productivity as well. The key to an advanced RMS is analytically assigning a value to a particular day that optimises the available demand in the market.

This value helps determine the optimal business to accept and maximises shoulder-night performance so longer length of stays aren’t turned away over high-demand nights. Hoteliers can then optimise rate availability through channels like voice reservations, booking engines and OTAs.

There's a common misconception that revenue optimization is only necessary on busy days. Effective inventory management can turn quieter shoulder days into high-demand periods, and using strategic pricing on less busy days can unlock new revenue opportunities.

Utilising AI to create new efficiencies

An RMS that uses AI and data analytics frees staff from laborious data gathering tasks. For instance, the production and detailed analysis of daily reports represents a huge time commitment. These tasks can take away from staff focusing on other more important pricing decisions. But the challenge isn't just finding time for analysis; it's also dealing with the exponential growth of available data, which makes it increasingly difficult to pinpoint what's truly relevant.

The data analysis methods employed by AI are becoming increasingly sophisticated and more accurate. This allows AI to play a greater role undertaking repetitive tasks and generating background analysis that can be used as the basis for critical pricing decisions by revenue management staff.

Managing a competitive environment

An intelligent, data-driven revenue management system can greatly improve pricing accuracy relative to a hotels competitive landscape. The RMS's algorithms consider both property-specific internal information like customer profiles, room types and prices, as well as external data, such as publicly available competitor prices, their reputation score data and even booking patterns captured on other websites.

Demand forecasts provide critical information for tailored pricing recommendations for each market segment or room class and can enable revenue managers to select appropriate distribution strategies to counter competitor pricing activity, as well as understanding guest preferences and willingness to pay.

The need for human decision-making

Although AI enabled revenue management technologies are highly capable, there will always be a need for experienced human oversight and interaction to achieve the best results. Hoteliers should utilise AI technologies to automate the critical, repetitive tasks needed to achieve their defined revenue strategies.

This allows these experienced revenue professionals to concentrate on areas where they can add value, like developing new strategies to grow business and profit. The partnership between humans and AI is crucial. AI isn't a magic solution; it's a tool that becomes more effective with human interaction. The more you engage with AI, the more refined and impactful the results will be.

Uncover trends, identify revenue opportunities with AI

AI-driven RMS solutions not only enhance pricing accuracy and market competitiveness, but also automate many of the routine, time-consuming tasks required to make it happen. By combining the strengths of AI technology with human insight, hotels can achieve optimal revenue management and are positioning themselves for success in a competitive market.

The use of AI-powered revenue management technologies is no longer optional, but essential for today's hoteliers. The vast and complex data landscape requires advanced tools that can efficiently analyse and optimise pricing and inventory. By leveraging predictive analytics and AI, hoteliers can uncover emerging trends, identify revenue opportunities, and make more informed decisions.

For more information on how your hotel can benefit from an AI powered revenue management system, please visit: www.ideas.com

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