The Intersect of Cloud Computing and Revenue Management

By Jon Higbie Chief Science Officer, Revenue Analytics, Inc. | October 15, 2017

Why Hotel Executives Should Have Their Heads in the Cloud

Cloud computing is a term that most people know about and are familiar with. However, many hotel executives don’t know that the advent of the cloud is reshaping the future of hotel Revenue Management – and they can benefit from it. First, executives need to understand the evolution of cloud computing. As the size of datasets increased – giving rise to the term Big Data – the cost to both store all that data and perform the processing required to leverage it has become incredibly expensive. Meanwhile, innovation in cloud computing – which means harnessing latent computing capacity to dramatically increase storage and computing capacity – has been moving at warp speed lately after evolving for decades.

In the late 1980s and ’90s, cloud efforts were largely centered on linking a company’s desktop computers and servers at night to solve problems, a cumbersome process that never quite worked except for a handful of specific applications. Then, as the internet grew, data and processing needs for e-commerce companies also grew. Suddenly, a single server, no matter how many CPUs, was not big enough. Multiple servers that could seamlessly collaborate were needed.

The technology – mostly software – has evolved to the point where today it is feasible for any company to implement applications in the cloud. Additionally, service providers such as Amazon Web Services ( AWS ) have reduced the need for large computers housed by a hotel enterprise.

This technological shift has made developing and delivering Revenue Management applications much faster, and supporting them much less expensive. Cloud computing is enabling the development of capabilities that Revenue Management practitioners have been striving towards for more than a decade, such as real-time integration of Customer Lifetime Value into pricing and availability; modeling consumer behavior from click-stream data to improving merchandising on the brand website; and integrating loyalty and total property spend into Revenue Management decision-making.

Today, many of the latest Revenue Management applications are being developed and hosted in the cloud. In some other industries, like retail and start-ups, the pace of adoption is even faster.

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Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.