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By Kaitlin Dunn, Writer, Hospitality Sales & Marketing Association International (HSMAI)
Every day that millions of Americans are getting vaccinated is one day closer to a post-COVID world. And in that post-COVID world, many systems and solutions that we took for granted will be obsolete or used differently, including revenue management technology. HSMAI’s Revenue Optimization Advisory Board (ROAB) discussed both the temporary and more permanent effects of the pandemic on RM technology on a recent call that was facilitated by ROAB member Dan Skodol, vice president of data science and analytics for Cendyn.
Here are key takeaways from the discussion, which presented a variety of viewpoints on this still-evolving issue:
BALANCING AUTOMATION AND THE HUMAN ELEMENT
- “I always used the analogy of autopilot for a revenue management system. You need to punch in your coordinates, but if a thunderstorm pops up, you’re still going to fly around it. When we look at our own internal metrics of how users engage with the system, we look at one end of the system where somebody is overriding 365 days, and that’s a problem. But we also see when there’s no interaction or overrides and that’s also a problem. We’re concerned that there’s an overreliance on the automation and we’re missing that human element.”
- “There’s a big course correction in terms of the overreliance on making sure that the technology is both the solution and the answer. How do we be intentional with these tools and craft a strategy so that we can drive outcomes? I think that skill somehow got under-presented, and people were more focused on implementing tools and building out features. I hope we learn from this in terms of how we lead and we try to get some balance back.”
- “Systems aren’t as quick to pick up paradigm shifts as human individuals, because people can cognitively understand the behavioral component of customers. We saw that in some of the shortcomings of our systems when the consumer behavior changed drastically, in terms of shorter booking windows and the velocity of bookings occurring within that timeframe. Some of the systems that we relied on to guide us didn’t necessarily pick up on that consumer behavior and we were left stranded until we were able to adjust. With customer behavior changing and customer behavior continuing to change in the future, what activity will they retain from the COVID world that will drive a post-COVID existence?”
EXPANDING OUR UNDERSTANDING OF ‘HISTORICAL DATA’
- “I think historical data is still going to be a relevant factor, because the systems need to understand what is not normal and that when pace jumps the rails or where future demand jumps the rails, there needs to be a reference to say, ‘Hey, this is not right,’ so that we can correct it.”
- “A reliance on historical data feels good to everybody because it’s definitive data. It’s very reliable. But what has it held us back from, in terms of our ability to accelerate our business? If anything, I see us as being at a crossroads with automation. We need to find a way to disconnect from some of these old constructs and find a way to attach to some of the more behavioral data that we have from consumers and accelerate going forward.”
- “I think a big opportunity to feed into revenue management systems is using more external data, such as weather. So, when there’s a hurricane and that changes the demand pattern for a hotel, how do we feed that kind of information into a revenue management system so that the AI is so much better than it is now?”
- “The reliance on forecasting is so high, but a big categorical shift has to happen, because if you can’t rely on historical data, you’re going to have to forecast better. It takes a crisis to make that shift, where you start taking in a lot of other things besides historical data. I think it’s a huge shift in the way revenue management is thought of right now in hospitality.”
SHIFTS IN THE DISCIPLINE
- “The shift is already happening to where I think that RM and marketing are going to form this unity together and it’s going to be its own wheelhouse department at some point, because we’re going to be providing strategies and tips based on what we need for visibility and they’re going to be the ones to implement based on what is needed.”
- “In the last three years, I’ve seen placement and visibility outweighing what I was dealing with in yield management. Coming from a leisure market area, it was all about the placement and visibility online and working with vendors from an SCM and SEO standpoint to make sure the algorithm made sense and our dollars made sense.”