Contributed by Christie Crawford, Area Director of Revenue Management, SHR

"Revenue management is both an art and a science. Your revenue manager is the bridge, interpreting both to create strong, practical strategies." —Teresa Stowell, Area Director of Revenue Management, SHR

Ask a revenue managerAt SHR, we know that you need solid answers to today's toughest hospitality technology questions, and we're here to help. Based on feedback from our own clients, we realized it was time for a clearer understanding of an often-complex area of hotel businesses—Revenue Management. In a recent Ask an SHR Expert webinar featuring Area Directors of RM, Nicole Adair, Teresa Stowell, and myself, we tackled your most pressing issues and questions, and how to make RM really work for your hotel. Our particular focus was on roles and responsibilities surrounding technology and communications. The following is a summary of our main discussion points, plus just a few of the many live questions we took from each area. The complete webinar experience can be found in the included recording.

The Evolving Role of Today's Revenue Manager

According to the 2017 Cornell Hospitality Report, Revenue managers have generally improved their analytical and communication skills over the last seven years. This might explain why 36% of our polled webinar audience who had an RM system was happy with it, and the 52% that didn't have one wished they did. The number of people with appropriate skill levels remains limited, however. Though the skills revenue managers currently provide are many, including forecasting, rate Loading, spreadsheet mastery, system management, pricing policies, report consolidation, PowerPoint presentations, and E-commerce, baseline skillsets and formal certifications still need to be improved as top managers move on and rotate out of the field.

Who should be responsible for monitoring our systems to keep amenities, data, and descriptions relevant and up-to-date? "Your whole team, ideally, needs to be responsible for this, at least keeping an eye out for changes," advised Nicole. "But in practice, it does make sense to have one key person own these areas so you have a touch point, and nothing falls through the cracks."

What is the outlook on the RM role, and the integration of more automated decisions in RM systems? "Everyone understands that more technology is being implemented all the time to help us manage rates and inventory. The more business intelligence we have, the better our strategies," said Teresa. "RM is an art and a science, so what the revenue manager really provides is personalization. The future is going to include more and more technology, so the person in that role is going to need to be a very strong bridge between the two."

Technology—Keeping Data Reliable

reliable data

According to a recent GBTA Foundation survey on Rate Loading, more than half of the corporate agencies polled (52%) audit internally through manual work—a significant investment of resources. Also, 36% expect that their travelers report erroneous rates. Still others receive reports from the Travel Management Company (TMC) (38%), hotel supplier (16%), and consultants or hotel solutions providers (15% & 11%). All these methods illustrate just how difficult it can be to keep on top of your data.

So, how do you go about keeping your data clean and making better decisions with it? By auditing every system on a regular basis (CRS, RMS, PMS, Content, etc.) This includes rate configuration and values, room types, and restrictions, particularly looking at if they are in place and verified regularly to ensure they are still valid. Also, make sure you keep your staff's data input training up-to-date.

How can I increase my revenue sources? My take on this is that it depends on what type of hotel you're talking about, and then the bandwidth of the person tracking everything. Do you want to do wholesale rates? Are you in parity? You just have to make sure it's all working for you, not against you because you're handling too much. Pare things down to what you can manage well.

How do I yield and optimize maximum revenue? "If you're watching your pickups, and monitoring your forecast, you can push rates more confidently," explained Nicole. "If you notice your pickup is lower, maybe react faster with better rates so you don't end up panicking and dropping rates too quickly later on."

Communication—Does Everyone Know What's Going On?

communication

It's helpful to ask the right questions when trying to figure out if everyone is on the same page. For instance, is your hotel holding regular revenue meetings? How are decisions documented? Are you keeping your revenue management activities transparent? Are all stakeholders involved or at least kept informed of decisions and their outcomes? Tracking these answers on a regular basis can help smooth out and even regulate the flow of communications.

How can I bridge the gap between RM, DM, and sales? "You can't have one function without the other two, really. So, performing a displacement analysis is vital," explained Nicole. "If you don't currently know how to do this, please reach out to us at SHR. We can help you make it happen, and get your communication between the three departments into better alignment."

Understandably, today's approach to revenue management differs significantly from that of two decades ago. Changes in pricing strategy, technology, channel management, inventory distribution, and the amount of data available have redefined the field. But no matter what size or type of hotel, every departments' decisions affect the others. This is why the most successful RMs have positioned themselves as arbitrators, sorting through the data to make better strategic decisions that will make your property more profitable. By bridging the gaps in your revenue management strategy today, you can better ensure your hotel's success tomorrow, and well beyond.

Related Resources

Aparium’s Revamped Focus on Conversion Rates Drives Success

Since its inception, Chicago-based Aparium Hotel Group has set itself apart as a new kind of hotel brand—one that allows itself to venture off the...

Read More

Hotel Rival Increases Direct Bookings By Connecting its CRS and Booking Engine

The 99-room Hotel Rival is a cozy boutique hotel in Stockholm, Sweden. Its central location in the city – along with its bars, bistro and the newly...

Read More

Changes and Challenges: The Post COVID APAC Hospitality Market

By Neil Kao, InTeam Hospitality; and May Faridah, SHR The Asia-Pacific (APAC) hotel region is facing its own unique set of challenges as it adapts...

Read More