In this interview we talk with Jens Munch, Co-founder and CEO of Pace, one of our Expert Partners
We get to understand who Pace are and why they started. How they set out to challenge the orthodoxies of the revenue management industry and have built a technology platform around that.
We learn that even in today’s hotel world a significant number of hotels essentially still use Excel spreadsheets, to differing degrees of sophistication, and how the larger revenue management solutions were founded in the era of decision support, which essential computerized a process previously performed by a human with a spreadsheet and how computation, as a second way, adds decision making and automation to enhance the solution.
Jens talks about their fundamentally different concepts from the beginning, when they set out to generate the most amount of revenue for a hotel from a starting point of “what is the right answer?”, not what answer does the revenue manager think is right.
He discusses how these two different philosophies can’t co-exist and you either lean towards predictability, where you have told the system what you want to do, or you have the best performance for a hotel regardless of whether somebody thinks it makes sense or not.
Adding to this discussion on different starting points Jens goes on to discuss the restrictive nature of comp sets and how comp set comparison very often doesn’t generate the best outcome for your hotel. At this point he introduces and expands on the concept of surge pricing and illustrates this with Uber’s approach to pricing. Eventually asking us “Do we want to be challenged by solutions?” Should they be sophisticated enough to challenge us or do we want solutions which just replicate what we already know – if we want the later (predictability) then Excel is a great tool.
Jens then goes on to talk about the two functions of pricing, explaining how the second function, which is often missed, is to test the price tolerance of your customers. He links this through to reinforcement learning and how he believes Pace may be the only solution in the revenue management space that is focused on reinforcement learning.
We finish by exploring the age old question of human vs technology.
We hope you enjoy the listen