Lesson #2: Algorithms, algorithms, algorithms
| Advertisement |
As I mentioned earlier, hotels and airlines use the same factors to determine rates. The major difference between airlines' yield-management and hotels' revenue-management processes are that the majority of hotels analyse all of the data collected manually, whereas airlines use sophisticated algorithm-based systems to analyse, interpret and price their seats.
Wait, did you think that American Airlines uses a channel manager? Nope, they're more high-tech than that. And your property should be too. Especially since airlines are competing in a much smaller market (there are perhaps 20-40 airlines flying to any given destination) than hotels, where there could be 500 different properties in a single destination. That's even more reason for hotels to get on board with automation and rate fluctuations, all handled by the capable bytes of a sophisticated algorithm-based revenue management system.
Surprisingly, there is only one company that offers a full-automated, algorithm-based revenue management system. Can you guess who that is (wink, wink, nudge, nudge)?
Article continues on next page...
Search our database of more than 2,700 industry companies
Oct 21, 2012 , Saudi Arabia
Very nice and very explanatory to the public. Some private Hospital use this concept but in a slight different way too. Hotels differs to Airline industries in retain their costumers to upsell thier own facilies (bars, outlets, mini bars, spas ect...) Airlines istead has to fill the airplane in q...
Oct 21, 2012 , United Arab Emirates
I totally agree to the points and this subject is part of european hotel management schools and universities since years. However there are some points to consider which differentiates both sectors in the same industry 1) All flights ( 99%) are pre-paid and No Show policiyes with airlines are...