How AI-powered Revenue Management and Personalization is Reshaping Hospitality Industry

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Automation has become the driving force in the evolution of revenue management. Leveraging advances in artificial intelligence and machine learning, the best of today’s solutions make pricing decisions and rate updates automatically. This allows revenue managers to focus their time on tactics and strategy rather than spending it crunching data and punching numbers into spreadsheets. The speed and complexity of the pricing decisions, and financial outcomes they generally produce, are unmatched by the most seasoned revenue manager using the most advanced solutions on the market only a few years ago. Such has been the blindingly rapid pace of technology innovation.

The ability to integrate new sources of data has also played a key role in driving smarter pricing decisions. Advanced revenue management solutions leverage not only the repository of historic data that resides in a hotel’s property management system, but also, in many cases, a vast array of market intelligence and other data, from competitor rates data to booking trends data. This makes it possible to more accurately forecast demand, and, as a result, increase hotel revenue and profitability in unprecedented ways.

That being the case, it’s no surprise that next-generation, AI-powered revenue management has taken the industry by storm. Some of the leading AI-powered solutions, often replacing legacy solutions that use a hands-on, rules-based approach for generating pricing decisions, now automatically generate in excess of a 100 million decisions across tens of thousands of properties each day. The results are impressive, with major hotel brands seeing their revenue numbers increase by millions of dollars a year. Smaller properties, too, are seeing substantial gains, in some cases driving incremental sales lift by more than 15 percent.

Great hospitality experiences drive guest loyalty. Guest loyalty drives recommendations and revenue. While larger chains have more customer and performance data to tap into, smaller operators have historically had a tougher time maximizing reputation, revenue and the customer experience. Artificial intelligence is changing all that. With its ability to streamline processes, provide valuable insights and optimize experiences, it’s driving the new wave of responsive, guest-centric hospitality. Here are just some of the ways AI is reshaping hospitality as we know it.

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Personalized experiences boost revenue and loyalty, and this is an area where hospitality has long been ahead of the curve. Tailoring your offering with thoughtful touches such as a guest’s preferred newspaper, toiletries, pillows and views keeps guests coming back. Now, that top-shelf bottle of merlot or the inclusion of extra-plush towels is something associated with high-end vendors and patrons. AIl can level the playing field, easily identifying the personal touches that draw people to your hotel (or your competitor’s), and tailoring your experience to the individual. You can also use AI to personalize your rewards program, not just for what to offer, but for who to include.

Maybe your property is pricing-optimized for ski season or beach weather. But what about minor holidays, conventions or concerts in your area? Understanding the impact of these on your occupancy levels is challenging. Even identifying them in the first place is a challenge. AI can parse multiple sources of information to give your business much more nuanced insight into the occupancy patterns of your area and dynamically adjust your pricing from day to day (Airbnb already does this with its host pricing recommendations). Plus, with greater awareness of the impact of particular events or calendar dates, you can now adjust your marketing efforts to maximize occupancy.

Bookings are a major friction point for hotels. Many users book through aggregator sites, and those who land on an individual hotel page often bounce without booking. Even if a user does wish to book, isolating preferred dates and check-in details can be time-consuming and complex, and opportunities to actually communicate with hotel staff are limited. By using AI-fueled chatbots integrated into your website or even within a social-media platform, you can reduce this friction while also providing a personalized experience. Develop a robust enough system and checked-in guests will even be able to place their roomservice requests to your AI, freeing up your staff (unless your staff are already robots, of course).

You want to deliver the best guest experience you can, but you also need to strategically channel your resources for the best return on investment. AI can use occupancy data, guest feedback and self-reported guest data to gauge which upgrades or repairs should be implemented first and which improvements will deliver the best return. It can also work predictively via pattern recognition to highlight potential issues before they arise—and to help streamline your maintenance workflows