AI has become increasingly important in the hotel industry, influencing solutions that are more specific. One example is revenue management.
Lodging Maricarmen Cádenas, Solutions Engineer spoke to us—IDeaS Revenue Solutions in the Americas, explains the advantages of this advanced revenue management tool.
1. Save Time
A RMS powered by AI allows group sales teams to spend more time on developing relationships with planners of events and customizing proposals. Cadenas said that with the aid of an RMS advanced, revenue and sales leaders are able to evaluate and assess opportunities. They can also confidently decide their strength and speed up negotiations.
Automation also speeds up multiday evaluations and alternate dates. The system, for example, can compare instantly a two-night midweek pattern with a three-night weekend pattern and reveal which pattern delivers a higher profit total after accounting of displacement, additional spend, or space usage. It saves hundreds of hours in manual spreadsheet work.”
2.
Reduce Errors
RMSs streamline the group booking process by applying consistent data-driven logic. This eliminates any human error. The system validates revenue, room needs and rates automatically, eliminating human error such as misreading dates and overlooking compressed nights.
3. Wide Data Sources
A RMS powered by AI can access data such as historical group booking patterns, future reservations and group blocks. It also has the ability to monitor market signals.
And it is able to see publicly accessible competitor prices. The incorporation of group data into forecasting models helps hotel managers account for cancellations and no-shows. It also accounts for group demand as well as group washing.
4. Maximizing Profit
AI is probably the best option for determining which group-transient combination is most profitable.
She explained that an advanced revenue management system maximizes the value of event spaces by dynamically evaluating each booking against potential profit, not just on room rates. By forecasting unconstrained business and applying intelligent pricing, and optimizing space, hotels are able to accept the best mix of customers while minimising revenue losses from displace guests. Every square foot of the event space will contribute to profitability.
5. Informing Sales Strategy
A sophisticated RMS does not eliminate the need for sales managers to strategize. Imagine that the RMS determines an event will take place in a peak period of a hotel, and that rooms are needed that could be sold at a higher price. Cadenas said that revenue managers and salespeople should work together to determine what is best for the business. The risk that transient demand will reduce revenue could lead to more favorable hotel terms being required.
The decision shouldn’t just be made in isolation. Upsetting a clientele that brings business in year after year might not be worthwhile.
It’s ultimately about using the best judgement to make informed decisions. She gave examples on how AI-enabled sales systems can help sales teams to strategically decide: “If future weeks appear to be weak across segments, then sales has immediate reason to negotiate or offer flexible terms.” If a group enquiry has a flexible date, the system will suggest alternative dates where the hotel can maximize both the guestroom profit as well as the function space utilization.
