Governments across the world are investing on upgrading commuting platforms such as revamping train stations, launching new superfast trains, adding more runways to airports. All of this enables more people to travel.
On the other hand, online channels have made it easy for travelers to research and book airline tickets, hotels, B&B’s etc. When more people travel, there is more demand for hotels and villas.
However, one size fits all theory in selling hotel rooms to everybody on similar platforms and offering them similar prices won’t work very soon. Not all of us have the same purchasing power. So why are hotel owners selling rooms at the same cost to everyone? This can be changed with data.
The more we understand travelers and their purchasing patterns and behavior, the better we can package our rooms and other services and charge what the customer is willing to pay. The airline industry figured this out a long time and ago. They use smart revenue management systems to sell seats at different rates – all done automatically.
Artificial Intelligence is more important than ever
When we start understanding consumer behavior and their purchasing patterns, emotions which trigger sales etc. we generate a lot of consumer data. Where can hotel owners store this data, and more to the point, how do they use this data to understand what’s in demand and what isn’t? This is where Artificial Intelligence plays a major role.
Collecting large quantities of data, crunching it to give hotel owners or revenue managers deep analysis needs a lot of computing power and smart algorithms. Artificial Intelligence, in the simplest sense is a combination of tremendous computing power and smart algorithms which use your consumer data and give you insights hitherto unknown.
Today, smart software can give you granular details about the age group of your customer base. They can tell you, how many of them are married and how often they travel and at what expense. All these details help you create the right sort of accommodation package at the right price to the right target market.
Today we have a choice of using AI in business to reach the right set of customers and sell smart and boost revenue. Tomorrow, you won’t have a choice. Either you will be forced to use AI and learn the tricks very quickly – while your competitors are already good with it, or you will be left behind.
Not all is doom and gloom though. All of us need enough time to understand a technology like AI, use it in our business functions and adapt to it completely. None of this can be done overnight. However, if you start early, you get more time to adapt.
Understanding your customer and creating the right product
There was a recent survey undertaken by American car manufacturers in Japan, to see why the Japanese don’t prefer American cars and trucks. The survey came up with three major reasons:
- American cars are huge and are not tailored for the Japanese narrow streets and roads – especially where parking comes at a premium
- Japanese cars are exquisitely made and their people are happy and proud of owning and driving Japanese cars
- Japanese car brands allow its consumers to customize their car before buying. From Dashboard color and materials to exterior color schemes
The lesson is, the Japanese car brands understood that ‘one size fits all’ will not work in Japan. Modern day hoteliers have to take a leaf out of the Japanese car brands and understand that each set of customers are unique and they don’t want to be sold the same thing.
Artificial Intelligence enables hoteliers to understand their consumers and create bespoke room packages and add on services (spa and relaxation for women, golf courses for men etc.) and price it right.
Data will power your employees
When insights are shared with your employees, they will be better equipped to communicate and serve guests efficiently than ever.
Using AI in your hotel business is not just about buying or subscribing to smart software and letting your revenue manager work on it.
Infusing AI into your business should be a cultural change.
All stakeholders in your hotel business will get affected and should get affected by AI when involved. The power is in the data. And your employees need that power to serve better and increase your hotel’s revenue.
Artificial Intelligence is affordable
There is more superfast Cloud computing power available today, which has led to many developers creating smart Artificially Intelligent software on the Cloud. The genius is in the way these software applications are packaged and sold to hotel owners. Today, you need not fork out hundreds of thousands of dollars.
For as little as a few dollars per room – per month, you can sign up for the most cutting edge hotel management software within minutes. Think of it as signing up for Spotify or Amazon Prime.
However, subscribing to smart software is just the beginning. Hotel owners need to understand the workflow of AI software and adapt their work culture and expectations with the capabilities of the software itself.