Today's Revenue Management thought:-

Pricing and Artificial Intelligence: Is this a Match Made in the “Cloud” ?

With the ability to analyze vast amounts of data in real time, AI algorithms offer the potential to identify optimal pricing points at any given time.

However, as with any new technology, there are potential drawbacks that Revenue Managers must be aware of to ensure effective and ethical implementation.

It's important to note that while AI can provide valuable insights and automate certain pricing processes, human expertise and judgment are still crucial. Pricing decisions should be aligned with business goals, ethical considerations, and regulatory requirements. Additionally, hotels need to ensure data privacy and security when implementing AI-powered pricing solutions.

Overall, when implemented effectively, AI can enhance pricing strategies, improve decision-making, and drive growth by leveraging vast amounts of data and advanced analytics techniques.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Will AI models soon replace revenue managers ?

AI models can assist hotels by automating tasks and providing data-driven insights for decision-making. But they’re unlikely to completely replace reveneu managers anytime soon. 

AI has a major role to play, but for now, human experts are still needed to wield this powerful new tool. 

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Do you cross your fingers while changing rates ?

Today’s predictive analytics allow users to understand the impacts of their decisions before they even make them.

Predictive analytics can indeed provide valuable insights and help revenue managers make more informed decisions. By analyzing historical data and using algorithms to identify patterns and trends, predictive analytics can help revenue managers forecast the potential outcomes of rate changes and make more informed decisions based on data-driven insights.

Take the right step & invest in automated pricing tools.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Keep it simple & don’t confuse your customer…….

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Do your homework, before signing up……

Do OTA loyalty programmes lead to rate disparity ?

OTA (Online Travel Agency) loyalty programs can potentially lead to rate disparity.

Here's how:

OTA loyalty programs typically offer their members exclusive discounts, cashback, or other incentives when they book through their platform. However, these discounts and incentives come at a cost to the hotels, which have to pay a commission fee to the OTA for every booking made through their platform.

To compensate for this cost, hotels may increase their rates on OTA platforms to offset the commission fee. This can lead to rate disparity between the hotel's website and OTA platforms, where the rates on the OTA platform may appear to be lower due to the discounts and incentives offered by the loyalty program.

Additionally, OTAs may use dynamic pricing strategies, where the rates for a particular hotel may change based on supply and demand, seasonality, and other factors. This can further exacerbate rate disparity and make it difficult for hotels to maintain rate parity across different channels.

In summary, while OTA loyalty programs can be beneficial for consumers, they may lead to rate disparity for hotels, which can impact their bottom line and create confusion for consumers trying to compare prices across different platforms.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Rate disparity - experiencing rate parity issues - identify the problem….

To address rate parity issues, it's important to identify the root cause and take appropriate steps to resolve the problem. This may involve implementing rate parity monitoring tools, revising pricing strategies, renegotiating contracts with distribution channels, or implementing technology solutions to prevent errors and discrepancies.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Is rate disparity advantageous for hotels ?

Not maintaining rate parity on your distribution channels can be a disadvantageous situation for the following reasons:

1. Reduced profitability: When different OTAs offer different rates, customers tend to book through the cheaper OTA, resulting in reduced revenue for the hotel. This, in turn, reduces the hotel's profitability.

2. Brand value erosion: If a customer sees that the same room is available at different prices on different OTAs, they may perceive the hotel as lacking consistency and integrity. This can lead to a reduction in the hotel's brand value.

3. Confusion among customers: When customers see different rates for the same room on different OTAs, they may become confused about which rate to choose. This can result in them not booking the room at all or choosing a competitor's hotel instead.

4. Difficulty in forecasting demand: When different OTAs offer different rates for the same room, it can be difficult for hotels to forecast demand accurately. This can lead to overbooking or underbooking, resulting in loss of revenue.

In summary, rate disparity is not advantageous for hotels because it reduces profitability, erodes brand value, confuses customers, and makes it difficult to forecast demand accurately.

It is in the interest of hotels to ensure rate parity across all distribution channels in order to maintain consistency and integrity in their pricing strategy.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Will the end of rate parity lead to a change in the distribution mix ?

The end of rate parity will potentially lead to a change in the distribution mix for hotels. Without rate parity restrictions, hotels have more freedom to offer different rates and promotions through various distribution channels, which could impact the mix of channels they choose to use.

Ultimately, the decision about the distribution mix will depend on a variety of factors, including the hotel's marketing and revenue strategies, its target customer segments, and the competitive landscape in the local market. It is important for hotels to carefully consider the benefits and drawbacks of different distribution channels and develop a distribution strategy that is tailored to their specific needs and goals.

However, it's worth noting that the impact of the end of rate parity on the distribution mix may not be immediate or significant for all hotels. Some hotels may choose to continue to offer consistent pricing across all channels, while others may decide to maintain their existing distribution mix. In the end, the key is for hotels to remain flexible and adaptable to changes in the market and consumer behavior, and to be strategic in their approach to distribution.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Thursday is the new Friday…….

I usually publish an inspirational image on Fridays. Tomorrow May5th is a public holiday in Denmark (Great Prayer Day), which our parliament recently abolished, so it’s being celebrated for the last time.

So Fridays inspirational image is being published today….. trying not to make things too complex.

Have a profitable week.

✌🏼

Today's Revenue Management thought:-

Are hotels ready for the Post-Rate Parity Era on OTA's ?

Inspired by the decision from the EU on rate parity clauses by OTA’s, I thought it would be a good idea to write about & did a little research.

I discovered this article from 2015 by Max Starkov discussing the subject and find the content still relevant.

Before we all start celebrating, we must ensure that we fully understand the full impact and consequences of differentiated pricing. In addition we also need to ensure that we have invested in the technology that allows us to take full advantage of situation.

Have a profitable week.

✌🏼