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Revenue Management

Not-So-Spooky: Why Automation Shouldn’t Be a Source of Fear for Hoteliers

The rise of AI and automation has captured the world’s attention lately.  While some of us are excited by the possibilities, others are understandably wary of the big picture impact it may bring.

It’s no secret popular media likes to latch on to the most sensational possible outcomes—after all, SkyNet and the deadly machines of the Terminator series make for some pretty captivating film subjects—but should we let those extreme possibilities of the future color our perception of automation today? Absolutely not.

In practice, the reality of automation for hoteliers is much more mundane. While the benefits of automation are clear—reducing the time and effort spent by staff on the routine and easily repeatable work, greater efficiency, etc.—there still remains a segment of the industry that seems spooked by the prospect of an automated RMS.

We’d like to change that.

It’s time to look under the bed, unmask the monster and shine a light on the creepiest corners of the automation attic by addressing some of the most common concerns we’ve heard from hoteliers about automated revenue management software.

Addressing 5 fears of revenue management automation

While there’s no killer robot revenue manager coming down the pipeline (rest easy, hotel sales teams), there are still some common concerns we can help address.

The fear: There will be no transparency

If you’re a revenue manager (RM) and your automated RMS has next week’s prices set significantly higher than your closest competitors, odds are strong you’ll have some explaining to do with your GM or the owner. While that prospect might sound scary, it’s important to understand that an automated RMS like G3 RMS is not a black box and provides tools—like Investigator—that highlight what’s driving the price and forecast.

You may find out that there are clear indicators of heavy demand for a date in question, and that the gap between your property and your competition is actually due to you being a step ahead of their more reactive approach.

The fear: My revenue management job will become obsolete

Whether you love your work or not, no one likes to feel like they don’t have a purpose. But by bringing an automated RMS into the fold, you’re really just adding another valuable advisor and an adept set of “hands” to the team.

Stephan Muhs, Citadines’ area revenue manager for their Arnulfpark Munich property, saw firsthand how helpful that “advisor” can be in a difficult group pricing scenario during the always-busy Oktoberfest season. His team knew higher rates were in order—but G3 RMS helped his team ensure they found the most effective rate.

“It’s not just one tool or one person doing the pricing. Between G3 RMS, our residential manager and I, we essentially have three experts working together,” Muhs says.

An automated revenue management system, in practice, serves as a productivity booster that helps cut out the tedious, time-consuming, and error-prone manual efforts on an RM’s plate. In their place? More time to focus on how to adjust to the outliers on their demand forecast.

“A revenue manager and an RMS should make each other stronger, so each can focus on what they do best,” says Richard Lont, revenue manager at Olympic Hotel Amsterdam.

The fear: I don’t want to give up control

We get it—it’s not easy to fully trust a tool when its performance directly impacts your livelihood. For some people, all the statistics and data points in the world that highlight the superiority of an automated RMS won’t be enough to erase that concern. So instead of performance metrics (of which we have plenty), let’s take a step back and address the concept of control.

Think of a self-driving vehicle. They often do a spectacular job of handling the basics—braking, obstacle avoidance, turning, etc.—but most understand it’d be foolish to not include manual driver input as a check on the system. In general, the same thinking applies for automated revenue management software. You have the ability to directly override the system if it’s absolutely necessary, but it’s important to understand that this should be done sparingly as overrides, like other inputs, will influence how the system responds to forecast conditions.

The best way to improve and “control” outputs is to put the focus on your inputs. Ask, “What does the system not know that I know?” and take appropriate steps to remedy. For example, if this year’s late-July spike in demand was tied to a Taylor Swift concert, the system needs to know this so it can adjust as well.

Part of what makes G3 RMS so effective as an automated system is its ability to self-refine over time. You control the initial setup, devise a strategy and provide a starting point for the system. From there, demand forecasting is influenced by performance data, price sensitivity, overrides, and other inputs like Special Event tags for appropriate outlier days.

The end result? A responsive forecast that quickly adapts to not just changing market conditions, but user input.

The fear: I don’t trust the system

Like with the self-driving vehicle example, it can be hard to trust an automated system until you’ve experienced it yourself. No matter how thoroughly tested the system is, it takes a small leap of faith to get past that initial bit of worry. That trust is critical—and can be liberating.

For instance, consider this anecdote from an IDeaS client. The property’s revenue manager was out of town on vacation during a day when a large concert that brought in plenty of booking demand was abruptly cancelled the day of the show. The RM got wind of the news and was ready to return to a total nightmare of guest cancellations and missed revenue targets. But with G3 RMS, the system was able to quickly process the resulting spike of cancellations and automatically adjust pricing decisions accordingly to help stop the bleeding and recoup as much revenue as possible. That’s an experience that builds trust—and that’s just one example.

It’s time to face your automated RMS fears

No matter what’s driving your concern, an automated RMS is nothing to fear. Every day, IDeaS G3 RMS helps tens of thousands of accommodations providers navigate their revenue management challenges and maximize their revenue potential.

So what are you afraid of? We’d love to help you take your property to new revenue heights.

For more information about how IDeaS could help your property, contact us today

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