Nowadays every profits management service vendor has an algorithm.
NB: This is a post from Pace Revenue, among our Expert Partners
And everyone likewise claims to have Artificial Intelligence under their hoods. In some ways, they do … but theres a big distinction between the myriad approaches …
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Weve moved on and services like IDeaS G3 Continuous Pricing can now look at specific bespoke space level prices, which is much better. The last frontier is to have a bespoke technique for each space night and lead time.
Over the last twenty years, weve slowly moved towards open rates. Duetto did some excellent work in the early 2010s by pushing that old bucket design out and showing that we should not have just 5 cost points and simply move between them– we need to use open pricing.
Weve moved on and solutions like IDeaS G3 Continuous Pricing can now look at individual bespoke room level pricing, which is much better.
Its time to take another big leap into the future. With modern-day data science we can now see what those rate points must actually be. And not just at the space night level … we can also see what the cost ought to be for different lead times. Thats essential. Hospitality likes to pride itself that its moved from home broad rates to room level prices but the reality is that not all of us are there. Duetto is still baselining things from a property level and not by stock– they will use that residential or commercial property large rates however will then assist you adjust the supplements between the space types.
What we used to do in profits management twenty or thirty years back was to take need– or take inventory and need– and create sectors from it. We would successfully sector that public demand, make projections and then produce containers and once those buckets were filled we would close them.
With open prices you might be able to set any price point, which is certainly better than the old stiff containers, however there is still little science underpinning those rate points. Open rates relies on the operator and the rules they set. Hospitality likes to pride itself that its moved from property wide prices to space level rates however the reality is that not all of us are there. Duetto is still baselining things from a residential or commercial property level and not by stock– they will use that property large prices but will then help you adjust the supplements in between the space types.
With open prices you may be able to set any cost point, which is definitely better than the old rigid buckets, however there is still little science underpinning those cost points. Open rates relies on the operator and the guidelines they set.
