In a world where AI is constantly at the top of our minds and algorithms and data science are driving our business decisions, I have to pose the question: have we lost the art?
There’s no question that human interaction in sales and reception are key components of hospitality. Revenue management is one of the first aspects we feel we can relinquish to AI. And why not? AI can analyze hundreds of thousands of data points in no time and adjust pricing based on signals before a human could even export the data table to excel. When reading Evolving Dynamics: From Revenue Management to Revenue Strategy, the study guide for the HSMAI CRME certification, I came across a view that shocked me a little bit, so I’ll share it here.
“Dave Roberts, Cornell University professor and former SVP of Revenue Strategy and Solutions for Marriott International, is well-known for describing revenue management of the future as requiring a human, a computer, and a dog; the human’s job is to keep the dog fed and the dog’s job is to make sure the human doesn’t touch the computer.”
With all due respect to Professor Roberts, I hope that he is wrong.
Revenue management is about more than pricing, and targets are about more than just revenue. Every hotel I have ever worked at or with in any capacity has had a different approach to filling rooms. They have all valued channels differently, approached marketing budgets differently, filled sales teams differently and evaluated their success metrics differently. So why then would we accept one algorithm to determine pricing for all these different hotels? Why reduce revenue management to a science, when all of the revenue managers I know are artists.
When asking revenue managers why they believe it is an art and not a science, here are some things that seasoned revenue managers who now form the Rate Yield team had to say:
“It’s the subtle art of surfing the wave of unpredictability, except that wave is on fire. You can use logic, rationality and data and end up creating chaos. Or you can adapt and create something like a Picasso.”
- Adeline Le Cornec, Customer Success & Onboarding Specialist
10 years of experience in revenue management
“It’s the art of messaging your strategy internally to get buy-in. It’s the art of understanding the value of different clients. It’s the art of being stubborn with your market managers and understanding that they can help you. It’s the art of balance.”
- Marc Bertrand, Founder & CEO
30 years of experience in revenue management
At Rate Yield our goal is not to reduce the input of revenue managers, but to empower them to design their strategy, adapt it, and focus on the most valuable areas of their role. Think of us as your palette and canvas. We can’t wait to see what you create.
