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Why AI Driven Revenue Management is Important
Artificial Intelligence, currently dominating the headlines, is harnessed to help hotel revenue managers sell their rooms for the best price, and AI can help hoteliers understand the real demand for their inventory by better understanding customer searches and needs. AI systems can be trained by tracking human decisions in revenue management and teaching the machine to provide an automated version of the human process.
AI can be applied to different research tasks, for instance generating specific market segments that can reveal the correlation between customer information and preferences. With AI, revenue management systems automatically assign attributes to more specific rate code levels to generate its forecast group, based on both characteristics and historical booking patterns. Also, AI and a machine-learning algorithm in the revenue system can evaluate the nearest competitor’s demand level, pricing, and so on.
A data-driven revenue management system can drastically improve pricing efficiency. The machine-learning-based revenue management system combines different strategies and data sources to set the best available rate for each room class on each date. The algorithms behind this dynamic pricing engine take into account customer profiles, room types and prices, and external data including competitor prices, reputation scores data and even booking patterns captured on other sources.
In addition to pricing, inventory management is another important aspect of revenue management. Revenue managers are allowed to capture the opportunity to increase prices and maximize revenue on high demand instances while maximizing occupancy on fewer demand days. An AI-based advanced revenue system can automatically make decisions and select the revenue strategies applicable to various market segments. Today’s advanced AI-powered revenue management system deploys automatic inventory strategy that improves profits and productivity.
Embracing AI technologies to improve repetitive tasks will help revenue managers in freeing up their time in concentrating areas where they can add more value to their hotel.