The Intersect of Cloud Computing and Hotel Revenue Management

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

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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