Algorithm applied to Revenue Management.
👉 It is a set of instructions programmed to analyze data and make automatic or suggested decisions in pricing and distribution.
📊 What is an algorithm in hotels?
On Revenue Management, a algorithm canidentify demand patterns, suggest ideal pricing, or forecast future bookings. It uses real-time data (bookings, cancellations, compset rates) to generate intelligent outputs. Specifically, it is a set of mathematical instructions or rules that process data to help in making automated or semi-automated decisions. They are used to optimize key processes such as pricing, distribution, demand forecasting, segmentation of clients or the customisation of the guest experience.
✅ Why is it important?
- Improves accuracy in pricing decisions.
- Save time by automating complex analytics.
- Reduces human error and bias.
- Enables dynamic, data-led strategies.
📘 Practical example
An algorithm detects a 25% pickup ncrease for upcoming weekends and automatically raises the rate for those dates.
