“Automation is an interesting word, and one that can mean many things to revenue management. There are many tasks, equations and algorithms that go into good revenue decisions. These numerical calculations can be automated so that managers have good data with which to make better informed decisions. Automation can also retrieve data that would not be humanly possible in the confines of days, weeks, etc., bringing more knowledge about markets, demand, and performance to the revenue decisions.
Most RMs are familiar with data analysis of historical performance, and combining that with current bookings to predict demand. Automation is a part of those calculations. But automation with larger fields of data (I hesitate to use the words “big data”, because really where does big data begin and end?), allows RMs to see beyond those traditional fields of data. Some revenue management systems use automation to collect and analyze internet search demand for airlines and additional hotels in a destination, bringing another level of demand data to the decision process.
The big problem with automation is when we ask it to take the place of management. We still need people to set and refine strategy, work with hotel management teams, and to consider outside information that may not be a part of calculations. Watching baseball with the new automated strike zones is an entertaining look at when we allow automation to make decisions beyond its full capacity. The future is not here yet, and for now, human interpretation is still needed, more often than we hope.
AI and machine learning can help us to better analyze data, and to make better predictions, if the data that is used represents future demand. Remember the old “Garbage In Garbage Out”? This still holds true today, even with automation, AI and machine learning. And even with the best tools, many an RM has spent an occasional day deciphering why history did not repeat itself in predicting hotel demand. But automation should make those days fewer and farther between.
Automation brings collection, computation, and analysis of a phenomenal range of data, and allows for quick calculations; all of which lead to better revenue decisions. And thankfully they quickly compute large algorithms so we don’t have to anymore!”