Revenue management automation is revolutionising the way hotels manage their data.
NB: This is an article from BEONx, one of our Expert Partners
Evolving technology is enabling revenue managers to access the predictive and prescriptive data they need for their strategies in a much faster and more efficient way instead of relying on gut instinct. It’s also internal revenue processes so that managers can instead focus on what matters most: revenue growth.
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So, what is revenue management automation, precisely? Why is it so important?
What is revenue management automation?
An effective revenue management strategy needs to be based on hard data and analytics. You need access to detailed historical data in order to understand your market, design profitable pricing strategies, and anticipate and react to demand trends. In the past, revenue managers would process all this data manually, which took a great deal of time and effort. These days we thankfully have access to tools and platforms for revenue management automation.
In simple terms, revenue management automation is the use of artificial intelligence and machine learning technology to optimise and enhance a hotel’s processes. The main objective behind revenue management automation is to streamline as many repetitive tasks as possible so that reliable data can be collected on an ongoing basis. That way, revenue managers get access to the real-time analytics they need to make accurate predictions, monitor their distribution channels, and design data-driven strategies. And this is essential for generating maximum revenue growth.
Benefits of revenue management automation
Revenue management automation has been around for a number of years now. Most hoteliers understand the benefits of automating basic repetitive tasks to improve the efficiency of their teams. However, we now need to start thinking about automation at a higher level. Can we automate decision-making, for example? Can we use data to make profitable long-term revenue strategies?
Let’s take a look at some of the more advanced benefits of revenue management automation.
Enhanced predictive and prescriptive analytics
Most people understand the concept of predictive analytics. However, we are now seeing the benefits of using another form of data analysis: prescriptive analytics. Prescriptive analytics combines your descriptive data (the current status of your business) with your predictive data (your demand forecasts) in order to identify (prescribe) effective revenue management strategies. You get access to valuable prescriptive recommendations that you can use to design actionable strategies that respond to your predicted forecasts. Essentially, this enables you to make better data-driven revenue management decisions based on solid recommendations.
With the range of opportunities that AI and revenue management automation now offer, revenue managers can access advanced tools that enable them to transform their data into a level of in-depth awareness that can be used for accurate predictive and prescriptive analysis. And this is changing the revenue management landscape. If you don’t keep ahead with these changes, then you will be missing out on valuable business insights.
Improved decision-making processes
Automating the decision-making process is the next big step in revenue management. Please don’t misunderstand us though. We’re not saying that this technology can do your job for you or that all decisions can be automated. The key is finding the right balance between revenue management automation and human insight. But AI can certainly enhance the decision-making process, especially when it comes to those daily, repetitive choices.
These days we have access to so much data it can often be overwhelming. There are quickly evolving market conditions, demand trends, and consumer behaviours. We have to take into account fluctuating pricing strategies as well as the changing needs and expectations of our guests. That’s a lot of data to process on a daily basis and it can sometimes be difficult to pinpoint which metrics you need to refer to when you make a strategic decision.
Revenue management automation uses AI and machine learning technology to scan through all your data, identify patterns, and highlight what’s most important at any given time. The right tools can recommend actionable strategies so that you know exactly what decisions you need to make at any given time.
More profitable long-term revenue strategies
Finally, revenue management automation can help you design more profitable long-term strategies.
For example, as we saw above, you can use an RMS to automate your basic, repetitive data collection and analysis processes. This ensures you have continuous access to real-time predictive and prescriptive analytics. You can also use RMS algorithms to automate your daily decision-making processes. This frees up a lot of time that you can use to work on revenue growth.
Perhaps most importantly, though, you can use the human factor to input your own knowledge and expertise so that your revenue management automation system is better equipped to detect anomalies and shifts in behaviour trends. In other words, with the right inputs, you can manage by exception and automation. And this is the future of revenue management. In fact, this balance of automation and human insight is precisely what you need to take your strategies to the next level and ensure long-term total revenue growth for your hotel.