Witnessing the evolution of technology is an inevitable part of the modern human experience. The rapid introduction of new platforms and capabilities into our personal and professional lives brings a mix of excitement and apprehension. On one side, advanced technology delivers unprecedented convenience, efficiency, and personalization. On the other, it raises concerns about replacing human-led processes with artificial intelligence (AI) and machine learning (ML), leading to fears of job displacement and diminished human touch in business.
While such fears are understandable, they often overlook a fundamental truth: today’s emerging technologies will become tomorrow’s essential tools. Just as calculators replaced manual long division, or email transformed communication, tools like generative AI (gen AI) are poised to redefine how businesses operate and educate. Hoteliers, in particular, must grapple with this reality. Do they resist change and risk falling behind, or do they embrace innovation and seize the opportunity to thrive in an increasingly competitive and dynamic market?
The hospitality industry, a sector that thrives on data-driven decision-making, is uniquely positioned for this transformation. Nowhere is this more evident than in the realm of revenue management, where agility, efficiency, and accuracy are paramount.
Beyond the Buzz: Is the Hype Around AI Justified?
AI has become a ubiquitous buzzword, dominating headlines and conversations across industries. For over a year, businesses have rushed to showcase their adoption and implementation of AI technologies, eager to gain a competitive edge. While some claims about AI’s transformative potential may be exaggerated, its application to hotel revenue management is far from overhyped.
To understand the potential of AI in this field, it’s important to distinguish between traditional AI and generative AI. Traditional AI systems focus on analyzing data, making predictions, and executing tasks based on predefined rules and algorithms. In contrast, generative AI creates new data, content, and solutions inspired by its training material, offering a much broader and more creative range of applications.
The sophistication of generative AI has grown rapidly, positioning it as a revolutionary force in revenue management. Unlike traditional methods that rely on static pricing models and siloed data, gen AI introduces a dynamic and highly adaptable approach to decision-making. This is critical in a field where real-time market changes often defy historical patterns.
Revenue management has always been a complex, data-intensive discipline. It requires balancing multiple variables—market demand, competitor pricing, seasonal trends, and customer preferences—to make informed decisions. Static tools and manual processes often fall short, leading to inefficiencies and costly errors. Generative AI addresses these shortcomings by aggregating vast amounts of data from diverse sources, including market trends, competitor behavior, and even unconventional inputs like social media activity. The result is a more accurate, comprehensive view of demand and the factors influencing it.
Reporting For Duty: Your Revenue Management GenAI Assistant
Despite its transformative potential, generative AI is not a replacement for human expertise. Instead, it acts as a powerful assistant, augmenting the capabilities of revenue managers and enabling them to work smarter, not harder.
Consider the example of ChatGPT. Since its public launch, ChatGPT has become a widely recognized tool for generating human-like text in seconds. While some feared it would replace copywriters, most professionals have embraced it as a way to enhance creativity and streamline their workflows. Similarly, Canva, a graphic design platform launched in 2013, initially raised concerns among graphic designers. Yet today, Canva complements their work by handling basic design tasks, freeing up time for more complex, high-value projects.
Generative AI in revenue management follows a similar trajectory. Tools powered by gen AI automate data analysis and transform it into actionable insights. This reduces the time and effort required for routine tasks, such as gathering data or creating pricing models. As a result, revenue managers can focus on strategic initiatives like market analysis, long-term planning, and building customer relationships.
By streamlining repetitive tasks, gen AI not only boosts productivity but also enhances decision-making. For example, revenue managers can rely on gen AI to provide real-time demand forecasts, dynamic pricing recommendations, and scenario modeling. These tools empower managers to make data-driven decisions with confidence, knowing their strategies are backed by robust and up-to-date insights.
Breaking Down Barriers to Personalization
One of the most exciting applications of generative AI in revenue management is its ability to deliver highly relevant and personalized guest experiences. Personalization has long been a cornerstone of hospitality, but achieving it at scale has been a challenge. Generative AI changes this by analyzing guest data from multiple sources—profiles, historical behavior, saved preferences—and using it to craft tailored promotions and upsell opportunities. These can be delivered at the right time, with the right messaging, to drive direct bookings and enhance guest satisfaction.
For example, a guest who frequently books spa treatments might receive a personalized package deal during their next visit, complete with room upgrades and spa discounts. Similarly, a family traveler might be offered bundled packages that include child-friendly activities and meals. These targeted offers not only increase revenue but also create a memorable guest experience, fostering loyalty and repeat business.
The ability to unify data from core systems, such as the hospitality management system (HMS) and customer relationship management (CRM) platforms, is key to this level of personalization. By breaking down data silos, generative AI enables hotels to gain a 360-degree view of their guests and use that insight to craft highly effective strategies.
Driving Profitability Through Dynamic Pricing and Scenario Modeling
Dynamic pricing has long been a hallmark of effective revenue management, but traditional methods often fall short in today’s fast-paced, ever-changing market. Generative AI takes dynamic pricing to the next level by analyzing a wide range of variables—including market demand, competitor pricing, and even external factors like weather and events—in real time. This allows hotels to adjust their pricing strategies instantaneously, maximizing profitability without sacrificing occupancy rates.
Additionally, generative AI enables advanced scenario modeling. Revenue managers can simulate various market conditions, pricing strategies, and demand fluctuations to understand their potential impact on revenue. This level of foresight allows hotels to proactively adjust their strategies, rather than reacting to changes after the fact. By staying ahead of the curve, hotels can maintain a competitive edge and protect their bottom line, even in challenging market conditions.
What’s Next forGenAI in Hospitality?
As generative AI evolves, its influence on revenue management is transforming the hospitality industry. Generative AI-powered revenue management tools are revolutionizing how hotels analyze, manage, and optimize their revenue strategies. By integrating data from diverse sources, these tools provide accurate forecasts, advanced pricing strategies, and actionable insights through automation and analytics. Designed for simplicity and flexibility, they enable team members across roles to customize dashboards with key metrics, fostering productivity and collaboration.
These advanced tools streamline data into a cohesive, interactive interface, uncovering hidden patterns, evaluating performance indicators, and enabling dynamic responses to market changes. They deliver tailored, real-time insights and support deeper, contextual decision-making. For example, users can inquire about:
Dynamic Pricing Recommendations: What should the room rates be for next weekend based on current demand trends?
Occupancy Projections: What is the expected occupancy rate for the next month by market segment?
Competitor Analysis: How do our prices compare with our local competitors in real time?
Revenue Forecasting: What is the projected revenue for Q1 based on current booking patterns?
Promotional Insights: Which promotions have driven the highest booking conversion rates?
Generative AI acts as a trusted assistant, rapidly processing complex data and empowering hospitality professionals to navigate revenue challenges with precision and confidence. By combining AI’s analytical capabilities with the creativity and expertise of human professionals, hotels can make smarter, faster decisions that maximize profitability, and enhance guest satisfaction.
Infor’s RMS stands at the forefront of this transformation, offering hospitality professionals the tools they need to harness the power of generative AI, streamline revenue strategies, and deliver exceptional results that set their properties apart in an ever-evolving market.
About Infor
Infor is a global leader in business cloud software specialized by industry. We develop complete solutions for our focus industries. Infor’s mission-critical enterprise applications and services are designed to deliver sustainable operational advantages with security and faster time to value. Over 60,000 organizations in more than 175 countries rely on Infor’s 17,000 employees to help achieve their business goals. As a Koch company, our financial strength, ownership structure, and long-term view empower us to foster enduring, mutually beneficial relationships with our customers. Visit www.infor.com.
Aaron SteinSr. Director, Global CampaignsInfor
