By: Marit de Vries – Senior Lecturer in Revenue Management
Professorship Disruption, Innovation and New Phenomena in Hospitality and Tourism
What will be the future of Revenue Management, now that Artificial Intelligence seems to have gained momentum and is changing our world rapidly? Some say this will be the end of Revenue Management, others, like me, say that Revenue Management will not disappear but must evolve. The key lies in treating Revenue Management not as a departmental function, but as an organisation-wide innovation engine powered by digitally native talent while that is characterizing the future Revenue Manager.
As part of my Phd by publication journey, I contributed as a panel member at the Global Revenue Forum in Amsterdam, where we discuss as well the future generations entering the workforce and how their role as Revenue Manager will look like in a world shaped by AI. This made me look into various angles of this phenomenon and the following can be seen as a summary of it.
Three perspectives on how Artificial Intelligence impacts Revenue Management
Among the most significant technological developments in industry is the inclusion of Artificial Intelligence (AI) into Revenue Management. Current research and industry analysis show that AIs capacity to process enormous volumes of data in real time allows more accurate demand forecasting, dynamic pricing optimisation, and personalized customer experiences previously unable to generate manually. This allows for hyper-personalization of offerings and not only including rooms revenue but all sorts of ancillary revenue streams like f&b, spa & wellness, parking, tickets, tours, and casinos which is paving the way for true total revenue management.
Role of the Revenue Manager
Not replacing Revenue Managers, AI is turning them from tactical operators into strategic decision-makers. By analysing competition rates, customer demographics, weather forecasts, and local events, AI-powered digital co-pilots let Revenue Managers concentrate on strategic initiatives instead of repetitive tasks. Automation of pricing changes, forecasting, and reporting increases human capacities and offers insights that enable managers move from tactical to strategic revenue optimisation. Using AI to assist their businesses in success, Revenue Managers are transforming into commercial strategists and total profit managers with their main duties executing the human oversight and apply creative problem-solving.
Development in Bachelor’s Education
What does this mean for us in education? Combining AI and sophisticated analytics into Revenue Management strategies requires new skill sets and knowledge areas. Students must be technologically savvy, analytical, critical thinkers, and strategic reasoners to interact with AI systems and being able to interpret AI insights, while maintaining human control and creative problem-solving. As well as being able to distil information from vast amounts of data, create dashboards from this, and being able to present them to the respective audience present (board of directors, investors, departments, trainees).
Industry perspective
With 38.1% sales volume increases, 20% revenue growth, and 31.3% operating profit increases, AI-driven revenue management is generating amazing business results across several sectors (Ma et al., 2024). Previously impossible at scale, real-time pricing, demand forecasting accuracy, and tailored customer experiences are being revolutionised in the hospitality industry by AI. Revenue optimisation with AI covers operational efficiency, customer segmentation, and inventory control. The real-time analysis of unstructured data and subtle booking trend patterns by the technology is enabling companies to move from reactive to proactive revenue plans, therefore influencing the competitive dynamics in many sectors.
Ma, X. ., Zeyu , W., Ni, X., & Ping, G. . (2024). Artificial intelligence-based inventory management for retail supply chain optimization: a case study of customer retention and revenue growth. Journal of Knowledge Learning and Science Technology ISSN: 2959-6386 (online), 3(4), 260-273. https://doi.org/10.60087/jklst.v3.n4.p260
About Marit de Vries, MA:
Marit de Vries is a Senior Lecturer in Revenue Management at Hotel Management School Leeuwarden at NHL Stenden.
Since 2016 she is involved in the research part and more specifically in co-writing chapters in books and writing articles as either co-author or by herself. Her journey started by writing about how Online Travel Agencies influence a customer’s choice for a hotel, also called, the information bubble. This made her write more about this topic either in chapters or articles. With time preceding, her interest in Revenue Management got expanded with Technology and Innovation and how both areas influence Revenue Management as well. Before diving deeper into that world, she first took a sidestep to delve into the Technology world by finding out what is written in literature about how Virtual Reality can be embedded in hospitality education.