PricingService.ai democratizes dynamic pricing in the Hospitality Industry
Identifying a significant gap in the market, Dan Zhang (Associate Dean for Research and Academics at University of Colorado Boulder) saw an opportunity to bring advanced, AI-driven pricing optimization to independent hotels, which represent about two-thirds of the market yet lack the sophisticated pricing strategies of their franchised counterparts. Many of these hotels, he noted, rely on rudimentary pricing due to the prohibitive costs of acquiring and maintaining advanced pricing systems.
To address this challenge, he envisioned a subscription-based service offering cutting-edge, AI-powered pricing optimization delivered via the cloud. This innovative approach led to the creation of pricingservice.ai, which democratizes access to advanced pricing strategies, making them accessible and affordable even for smaller, independent hotels. By leveraging cloud technology, the service eliminates the need for hotels to hire dedicated personnel or manage complex software systems, significantly reducing costs and leveling the playing field in the hospitality industry.
In 2021, Dan co-founded Pricingservice.ai and secured its first customer in December of the same year, with the company officially forming in 2023. The co-founder's background as an Associate Dean of Research and Academics at Leeds, specializing in advanced data analysis and holding a keen interest in addressing substantive business problems through research, played an important role in the venture's creation. The motivation to create a real-world impact led to collaboration with two other co-founders: Professor David Li at the City University of Hong Kong and Matt Schwartz, the Chief Technology Officer at SageHospitality. Their collective expertise and the recognition of an opportunity in the hotel industry were instrumental in launching this innovative pricing service.
Historically, setting the right prices for hotel rooms was a grueling task, burdened by the need to consider countless variables ranging from event schedules to weather patterns. The use of AI in this domain has revolutionized the process, enabling automated systems to make pricing decisions with minimal human intervention. PricingService.ai's system exemplifies this shift by integrating with leading property management systems, such as those provided by Oracle, to offer dynamic pricing updates. This integration allows the system to adjust hotel room prices every few hours based on a comprehensive analysis of data, including historic booking patterns, upcoming events, competitor pricing, and even weather forecasts. This level of responsiveness was previously unimaginable, as manual adjustments in response to rapid market changes, like a surge in demand due to a Taylor Swift concert, would be too slow and impractical.
The system was developed from scratch, and incorporates custom algorithms designed to optimize hotel pricing effectively. This AI-driven tool not only enhances the efficiency of pricing strategies but also ensures that hotels can respond to market dynamics swiftly, maximizing revenue and staying competitive in a fast-paced industry. PricingService.ai is not just about leveraging AI for better pricing decisions; it's also a symbol of redefining the future of hotel revenue management by making it more adaptive, intelligent, and efficient. Through their innovative use of AI, the founders envision a new paradigm for the hotel industry, where data-driven insights lead to smarter business decisions and ultimately, greater success in a highly competitive marketplace
