As revenue management capabilities are improved by science, the presence of intuitive human intervention becomes all the more critical for hotels to optimise revenue and profit.
Described by senior hospitality executives as a delicate balance of art and science, revenue management has been reshaped by technology, with artificial intelligence (AI) and data-driven sciences expected to become the absolute competitive advantage hotels need to optimise their revenue and profit.
Recent technological advances have allowed hotels to use data to determine ideal pricing variations, improve the booking process, better understand the consumption motivations of specific market segments and thus allow personalised marketing campaigns and guest experience to happen, among other things.
No doubt, hoteliers who master technology and integrate it into their organisational culture will be able to maximise revenue not only from hotel rooms but all streams including meetings and events and F&B.
A joint effort
While the right algorithms and a methodical approach allow revenue managers to turn data into actionable insights, the industry agrees that hospitality is fundamentally a people-centred business that responds dynamically to changes in sentiment. As such, revenue management cannot do without the human touch.
Tracy Dong, senior advisor of advisory services, IDeaS, commented: “Machine-learning (and) automated revenue technology can handle and process more data (and) more accurately than any human can ever dream (to do). But the art and refinement of revenue management must come from the minds of experienced individuals.”
She emphasised that “smart people and intelligent technology are not at odds”, and that joint effort is needed to achieve greater profitability and productivity.
Agreeing, Melissa Gan, managing director, Asia-Pacific, World Hotels, drew parallels between intelligent revenue management and a game of chess. “The data is on the board where we can all see and access the same information. However, based on experience, assumptions and predicting human behaviour can bring about more than one possible outcome.”
In fact, hospitality industry leaders believe that as technology supporting revenue management advances, skilled and intuitive revenue managers will rise in demand.
Hong Ruoying, associate director, revenue management and revenue optimisation, with Marina Bay Sands, Singapore, quipped: “Revenue managers now play an even more important role to ensure business sustainability. As markets open up and start to embrace meetings and travel at different rates, the collective nimbleness of revenue management, space optimisation, online distribution, and e-commerce will determine how quickly promotions can reach key markets, and how dynamic the rate can become.”
An eye on market needs
The need for human intervention in revenue management is evident as the travel and tourism industry learns to cope with changing travellers’ needs amid a Covid-19 pandemic.
Ben George, senior vice president and commercial director, Asia Pacific, Hilton, pointed out that travellers, emerging from post-Covid-19 lockdowns, will demand much greater flexibility and cost-effectiveness from their travel and tourism suppliers.
“Hotels will serve as more than just a place of lodging, but also a point of connection and convergence with local, in-destination activities,” George predicted.
“This presents an opportunity for hotels to create platforms or avenues that connect guests to unique experiences and local know-how, and to consider partnerships that could lead to more innovative programming and unlock new revenue streams,” he added.
Cinn Tan, chief sales and marketing officer, Pan Pacific Hotels Group, has identified new tourism opportunities for “emerging markets such as Myanmar, Cambodia, Vietnam, Laos and even second- and third-tier cities in mature countries like Indonesia and China” that are inspiring evolved revenue streams for her properties.
“We see new investments and new industries arising which contribute directly to the corporate segments,” Tan said.
For example, demand for corporate short- and long-stay is on the rise. To leverage this opportunity, Parkroyal Yangon converted some units into Soho (Small Office Home Office) serviced suites in 2019.
Tan added: “For mature markets, we now look beyond rooms and are providing more than beds for heads. As consumers are generally more sophisticated, hotels are catering to the lifestyle trend of dining experiences and adventures for both local and overseas guests.
“Travellers, especially family and solo travellers, now look for experiences that enrich and expand horizons through exploration and education journeys. Hotels are providing these either as added/packaged experiences, for example, cooking classes, partnering local suppliers, or part of their loyalty programme privileges, like the Pan Pacific Discovery local experiences.”