Revenue Management

Hospitality Technology Trends: How AI Is Revolutionizing Hotel Revenue Management

The hospitality industry is buzzing with innovation driven by powerful new hospitality technology trends. Technologies fueled by AI and machine learning are driving trends – and bolstering everything from guest experiences to revenue optimization. These exciting shifts are transforming the way hotels operate and how guests plan and enjoy their stays.

In this blog post, we explore impactful recent hospitality trends, including the rise of cutting-edge technology and its influence on revenue management, the guest experience, and overall operations. We also dive specifically into the concept of AI-driven revenue management, highlighting how hotels are leveraging data to gain deeper insights, how automation is streamlining workflows and how innovative, data-driven solutions are enhancing guest satisfaction.

The Evolution of Hospitality Revenue Management

Before we dive into the trends of today and tomorrow, it’s important to review the past. Revenue management in the hotel industry has been exciting to watch evolve since the days of basic forecasting methods and manual efforts to periodically adjust room rates.

Once the concept of dynamically adjusting prices based on changes in supply and demand caught on, hotels experienced results that reflected these improved pricing strategies. From there, it was only a matter of time before technology advances enabled automated revenue management systems to provide efficiencies and more valuable insights across the organization – from marketing, sales, distribution, operations, and beyond.

While this evolution in the scope of an RMS’ influence has taken place, consumer trends have changed. Most everyone has easy access to the internet and can evaluate myriad accommodations with prices that resonate with them. Guests want a seamless booking process, flexible policies, good value, and a great experience overall—and that’s influenced how hotels and in turn, revenue management systems, operate.

Today, hotels are using revenue management solutions that provide personalization of their pricing strategies. By leveraging their guest data and segmentation, hoteliers can offer tailored pricing that optimizes revenue while enhancing guest satisfaction.

The Changing Role of Revenue Leaders in a Tech-Driven Hospitality Landscape

A revenue manager’s work has evolved significantly with technology advancements. They’ve moved from setting rates using spreadsheets, to interacting with technology to help automate and refine that process, to now becoming revenue leaders who need to be able to effectively communicate revenue strategy throughout the organization.

This evolution is not without challenges. While many revenue managers may be very comfortable with their numbers and analysis, some may be less comfortable in driving the interdepartmental changes needed to help their organization think differently and make the most of their revenue opportunities.

Revenue leaders can shine within their organization by going beyond the minutiae of the data and articulate what it means for the organization at a bigger-picture commercial level. This means understanding the business impact opportunities may bring and having the influence to get ideas circulating at the right levels within their organization.

Great revenue leaders should spend most of their time guiding the commercial change their hotel needs. While setting this direction is a collaborative process, it should be led by insights which are in the wheelhouse of the revenue manager.

A great revenue management solution like G3 RMS helps commercial teams gain confidence in the outputs it provides—and there’s a long track record of success to back it up.

5 Hospitality Technology Trends Shaping the Future of Revenue Management

With the rise of AI and automation in hospitality, the revenue management field is at an exciting crossroads. Here are five hospitality technology trends we see shaping today—and tomorrow—in the revenue management field.

Hospitality Technology Trend #1: Advanced Analytics Taming Forecasting Uncertainty

If an RMS is an engine for revenue growth, data is the fuel that powers it—and what’s done to process and refine that “fuel” has a huge impact on this engine’s efficiency.

There are many data sources and factors that can feed an RMS, such as historical data, future on-the-books, market trends, competitor data, reputation scores and more.

Many solutions display external data within the RMS interface for the revenue manager to decipher and decide how to use, but all too often that introduces unnecessary noise into the equation. Knowing most revenue managers are extremely busy and have more strategic endeavors to focus on, a sophisticated RMS keeps that noisy, up-for-interpretation data analysis under the hood, so to speak. These decisions are driven by powerful, adaptable demand forecasts that continuously learn and optimize pricing and inventory strategies.

With machine learning enabled advanced demand forecasting methods that take in factors like the hotel’s data, booking pace, guest segment price sensitivity, competitive data, market trends and more, revenue managers can efficiently and confidently generate and distribute optimal prices by room type and/or market segment.

Hospitality Technology Trend #2: AI and Machine Learning Enable Better Pricing and Forecasting

AI-driven revenue management is a major hospitality trend. Artificial intelligence (AI) combined with machine learning empowers hotels to unlock the potential of vast data sets, make more accurate demand forecasts and refine pricing strategies.

A modern RMS uses a variety of analytical models in forecasting demand and estimating guest price sensitivity. These models are specific to hospitality demand and auto select to optimize pricing and rate availability with a keen understanding of segment relationships and unconstrained demand.

These forecasting models refine over time as more data comes in. This is an oversimplification, but it can help to think of it this way—this wide variety of forecast models outputs a range of demand projections. With limited data, that range of potential demand forecast outcomes is wider as there are more elements of uncertainty, but as more data comes in this range narrows. Over time, advanced forecasting methods get better at understanding which demand forecast models are more likely to be accurate for a particular property and in turn, weight those models’ projections accordingly.

Hospitality Technology Trend #3: Hoteliers Thrive with Next Generation RMS Features

Advanced revenue management tools are making a transformative change for thousands of hotel properties across the world. Take The Olympia Companies’ recent adoption of G3 RMS—of note, one of their properties saw a 10% year over year increase in ADR.

As hoteliers consider automating revenue management, they should first decide if they want a sophisticated machine learning tool that analytically determines decisions, or if they want a tool that is based on manual rules (which oftentimes stem from operators’ gut feelings) that govern the solution.

For those looking for an ideal, advanced solution, you’ll want to ensure it provides:

  • Versatile, automated pricing that adjusts and remains competitive when demand fluctuates, business segments shift, or booking trends change.
  • Accurate demand forecasts that are based on varied, relevant, and properly weighted data sources that quickly adjust to market changes.
  • The ability to manage by exception with workflows that reduce repetitive, tedious work and gives revenue managers more time to focus on strategic initiatives. It’s not a “set it and forget it” situation though, users still can interact with the solution in many ways that imparts what they know.
  • Tools for maximizing group business. With the influx in group demand, hoteliers need a solution that forecasts both their transient and group business. Sales managers can quickly respond to inquiries and determine if the hotel is likely to make more money by accepting that group or if they should hold out for the expected transient business.
  • Solutions for revenue management at scale. For organizations overseeing multiple properties, efficiency is key. The ability to quickly gather and synthesize revenue insights and, in turn, efficiently operationalize revenue strategy changes at scale helps hoteliers do more with less.

Hospitality Technology Trend #4: Powerful Solutions Require Ongoing Employee Training

It’s no revelation, but powerful tools require knowledge to be used effectively. The teams wielding these tools aren’t static—established RMS power users on staff get promoted, move on to new opportunities, and so on—which is why IDeaS has placed an emphasis on building an industry-best client training and support structure that ensures clients have what they need to be successful for the long haul.

That client support goes beyond the obvious—and critical—start-up training and orientation for new client properties. For instance, throughout the duration of their relationship, IDeaS clients work closely with a Success Manager who helps ensure the hotel’s pricing strategy is being carried out effectively.

IDeaS has also developed training content that’s tailored to the user’s job role on the property. With this content, users build confidence through self-paced interactive learning modules and one-on-one guidance from IDeaS experts.

Within the solution, users can access step-by-step guides, visualizations, and micro-demos where and when they need them without switching screens.

Additionally, IDeaS users can take advantage of ongoing on-demand e-learning and live events like monthly webinars, community Q&A sessions, and expert panel discussions to increase their learning and engagement in the solution.

All of this effort, at its essence, is about making sure clients can get the answers and help they need when they need it.

Hospitality Technology Trend #5: AI-driven Revenue Management Continues to Transform the Field

In a modern, cloud-based RMS, AI and machine learning are hard at work finely tuning the core analytics to maximize profit or revenue by automating the decisions of pricing, rate availability, and overbooking.

AI uses in revenue management will continue to ease your most mundane and repetitive tasks so you can add value in other areas.

Outside of the RMS, hotels have a clear opportunity to use AI tools and applications to analyze guest data and improve their experiences, whether that is through streamlined bookings, high-tech room amenities, or more convenience.

It’s time to get on trend

Technology is a driving force for change—change that can lead to new capabilities, efficiencies, and yes, improved profitability. While it’s true not every technology trend will take hold or be worth your investment, “playing it safe” by sticking to the status quo can and will eventually backfire.

When it comes to AI and revenue management systems, the future is now. If you’re ready to embrace that future, our hospitality revenue management system buyer’s guide can help you walk through some of the key considerations for evaluating a modern RMS.

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