Impact of automated revenue management system using Artificial Intelligence in hotels

It is time that concepts like Artificial Intelligence and machine learning also enter the field of marketing and pricing, and not just directly relating to enhancing superior guest experience, says Siddharth Goenka, founder, Aiosell Technologies.

Hotel bookings around the world have changed much faster than what the industry had anticipated. Players in the sector have recently witnessed a lot of automation and innovation around guest experience and augmented reality.

Hotels around the globe see almost more than 70 per cent-90 per cent of their rooms booked online on OTAs. As per the Expedia Millennial Survey, 62 per cent of the Indian millennials prefer to book their tickets through an online travel agency, and 19 per cent of them prefer to book through the airline and hotel websites directly. This change has led to a paradigm shift for revenue management and pricing for hotels.

Technology adoption is needed in the hospitality industry for several reasons. The ubiquitous availability of internet and smartphones have made millennial and modern guests more discerning and wanting more experiential and personalised services. Moreover, increasing competition makes it even more important for hotels to differentiate themselves, and technology is turning out to be a big USP for hotels.

Hotel rooms are a perishable inventory (like airline seats and movie tickets), which need to be priced appropriately because if they go unsold, they will never be recovered back. The ease of internet on smartphones has made two primary changes in the hotel booking patterns: Customers are increasingly buying hotel rooms online, which reduces the role of traditional travel agents and offline channels. Moreover, the average booking window (the period between booking and check-in) is reducing drastically, in many cases to last 48 hours and in many cases to last 24 hours.