Artificial Intelligence Is Coming to Hotel Pricing

Good morning from Skift. It’s Monday, July 17. Here’s what you need to know about the business of travel today.

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Episode Notes

Some hotel executives have expressed concerns about the security and reliability of today’s generative artificial intelligence. However, industry experts are confident that AI will make room pricing more profitable, reports Senior Hospitality Editor Sean O’Neill. 

Former IHG executive Jeff Edwards said revenue management would be the perfect use for the technology because it is too complex for humans to manage in real-time. Future tech could also enable dynamic pricing for individual rooms. O’Neill notes an extra-spacious room appearing frequently on social media could, in theory, command higher rates. Ryan King, an executive at hotel software services firm Shiji Americas, said revenue management software platforms could assign specific rates for certain rooms based on perceptions of those rooms. 

O’Neill also writes that today’s revenue management systems often struggle to handle non-room revenue, including spending in hotel restaurants and spas.  

We head to San Francisco next. Global Tourism Reporter Dawit Habtemariam writes the city’s struggling downtown is holding back its tourism recovery. 

Although some neighborhoods outside of San Francisco’s downtown have seen an increase in visitors, Habtemariam reports several tour operators aren’t enthusiastic about taking groups to the center of the city. One tour operator, G Adventures, said it now starts tours in Las Vegas instead of San Francisco and that it has reduced the time its tours spend there. Another tour operator said he avoids group trips to the city. 

Local officials recently launched a global marketing campaign called “Always San Francisco” in an attempt to counter the city’s negative reputation. San Francisco Travel Association Chief Marketing Officer Lynn Bruni-Perkins said the organization wants to remind the public that the majority of visitors to the city last year said they wanted to return. 

We finish today in India, the host of the Cricket World Cup this fall. The country is racing to have budget hotels ready for the start of the event in October, writes Middle East and Asia Reporter Amrita Ghosh.

The rush to provide cricket fans more budget accommodation options comes as event organizers expect to see an enormous demand for tickets. Budget hotel operator Oyo said it will add 500 hotels in host cities to its portfolio over the next three months. An Oyo executive said the hotels will be located near tournament venues. In addition, India-based online travel company MakeMyTrip has unveiled plans to increase its inventory of homestay properties during the cricket season.