Spreadsheets are for Accountants

Spreadsheets are for Accountants – Smart Revenue Managers Harness the Power of AI

The hospitality industry is going through a truly exciting phase of innovation. One thing that's got everyone talking is AI and ChatGPT. With businesses constantly facing challenges like inflation, debt, and unpredictable markets, this new tech has got people wondering about the future of entire professions.

During a lively panel discussion at an event hosted by Mews, we brought a crucial topic to the forefront: "The future of hospitality revenue management." Stepping up to lead the discussion was Thibault Catala, COO of Vertell Asset Management and the Founder of Catala Consulting.

AI is an Extension of Humans

Thibault: We had to start by addressing the elephant in the room: ChatGPT. What the panel did well was this: it was established early that AI is not a replacement for humans, but an extension of them. That helped focus the group on key aspects, such as the importance of staying in touch with these developments closely. What became clear is that this time right now is about the democratization of AI and about making an open audience understand rapid developments.

Jason: Staying ahead requires embracing a growth mindset, which involves continuous experimentation and perseverance. The clear opportunity here is to use the tools of data science to influence your whole business in a powerful way. Do not stop at revenue management! Ideally, strategy drives decision-making. Decision-making drives actions. Those actions drive results. If you don't see the results, it's time to make adjustments on this path.

AI Becomes an Assistant to Revenue Managers

Thibault: Human ideas and strategies are powered by AI. It's used as a tool rather than a replacement. Artificial Intelligence collects data and makes sense of it, then shows what it thinks is the most important information. Any user can combine this with the trends and patterns they consider pertinent and act. It's a comic book example but think of J.A.R.V.I.S. in Iron Man; AI is the assistant.

Jason: We did talk about what that meant for revenue management and how AI will specifically assist us there. I think I mentioned the old example of how accountants, arithmetic geniuses of their time, did not lose their jobs when spreadsheets completed calculations for them; they advanced the profession and dedicated their strengths to other parts of the process. Accountants use spreadsheets. Revenue Managers use AI.

Machines Explaining Complex Issues in Simple Terms

Thibault: AI allows people to do more with less; for hotels and revenue management, that means going beyond managing rooms. Widely expected improvements that the group listed were enhanced forecasting, personalization, and automation. I'd say the answer is communication. Just like a GM asks a Revenue Manager "Why" and "What is included in this analysis", AI cannot be a big black box. There has to be a sense that we understand or control the machine. That means AI has to make the process more transparent. A system should not simply produce a suggestion, but communicate that "based on developments in x over the last 50 days, we suggest doing this."

Technology is a Catalyst for Profit

Jason: In an industry where infrastructure and information sharing still have room for improvement, technology should be a driving force for maximizing profits.

Thibault: There was a shift in focus from revenue to profitability during the pandemic, and, arguably, revenue is now back. I do agree that profitability is even more critical, but let's see Total Revenue Management as a step in between. A focus on profitability is easier pursued by big brands, whereas Total Revenue Management, driven by AI, sounds like a way to entice those hotels that have never participated in revenue management, to do so now. I believe the way to accelerate a focus on profit is to make Total Revenue Management more accessible, supported by AI.