Hotel companies are placing their hopes on artificial intelligence (AI) to enhance their revenue management practices when it comes to pricing rooms.
This field relies heavily on accurate forecasting and is considered ripe for disruption, prompting hoteliers to explore the potential benefits of AI technology.
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Hoteliers are enthusiastic about the prospects of AI in revenue management, but acknowledge that the transition will not happen overnight. However, while concerns surrounding the security and reliability of current generative AI systems have been raised, industry experts anticipate that software developers will overcome these flaws in the coming years, leading to improved efficiency and profitability for hotels.
AI’s role in enhancing automated rate recommendations
One area where AI could significantly impact revenue management is improving automated rate recommendations.
Current revenue management software generates tables or spreadsheets, leaving revenue managers to interpret and implement the suggested rates themselves.
However, scepticism among hotel staff, especially as the target date approaches, has tended to lead them to disregard the system’s recommendations.
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By GlobalDataAI technology offers a promising solution. By leveraging generative AI, hotel managers could interact with the system through a chat interface, allowing them to ask questions and receive clarifications in plain English regarding the assumptions behind rate suggestions.
This transparent and intuitive approach aims to build trust in AI-powered recommendations, empowering revenue managers to make more informed pricing decisions.
Security and reliability challenges
The integration of generative AI could also provide valuable insights to individuals higher up in the organisational hierarchy, such as asset managers and owners. These stakeholders will often have perceptions of their assets’ value and what the market is willing to pay.
With AI’s analytical capabilities, they can gain deeper insights into revenue management, facilitating more accurate decision-making and maximising profitability.
It is evident that hotel companies recognise the potential of AI to revolutionise revenue management, particularly in the domain of pricing rooms.
While concerns about security and reliability persist, industry professionals remain optimistic that software makers will overcome these challenges in the near future.
The ability of AI to instil confidence in automated rate recommendations through transparent interactions is poised to transform revenue management practices and improve overall efficiency in the hotel industry.
