SalesPosted by Annemarie Gubanski Jan 28, 2014 17:29:57
The power of Loyalty
In an article that Cornell University published recently, the implementation of loyalty programs
for two groups of independent hotels showed a positive effect. Both ADR (between
1-5%) and number of room nights (nearly 50%), booked by the loyalty program
guests, increased. Interestingly enough, the analysis included even the hotels’
I listened to Tom Savigar from The Future laboratory who held an excellent talk
about the implications of a changing demography on the Hotel Industry. He predicts
the end of Business-To-Business (B2B) and says that the hospitality industry
should have a direct dialogue with the guest. This is even in line with the recent
article from Bryan Kramer “There Is
No More B2B or B2C: There Is only Human to Human (H2H)”,
where he states that “Marketing
increasingly strives to become one-to-one, with solutions to collect and
wrangle the big data about us to serve up more personalized offers and
In a world
where direct contact with the guests is increasingly important, what is the
most effective way to create loyal guests?
The impact of Loyalty
University’s study shows; a loyal guest can be a profitable one and having a
direct dialogue with each individual guest is a powerful factor to create
loyalty. Loyalty is even an important factor in the negotiation process, as
companies should and would like to offer discounted contracted rates to their
most loyal corporate accounts.
In my role as a
consultant, I often come across companies that would like to discuss the best
way to increase loyalty and the need for a loyalty program is often raised.
This is a very important question as not only such a program obviously can
increase Total Revenue (as Cornell University’s study showed), it can also be
used to encourage guests to book directly with the property. However, the cost
of such a program should be taken into account as well, as the benefits to the
guests come with a cost.
from hotel chain Scandic recently spoke on the first Hotel Market Seminars on
Distribution and Social Media held in Stockholm. She says that especially
Hotels and Restaurants have a big potential in using Social Media as many of
their potential guests are using these types media and would like to tell that
they are staying at a specific hotel and are eating a fantastic dinner. I would
like to add that, in my opinion, this counts for the whole hospitality
industry. Social Media offers a great opportunity to create direct contact with
your guests and increase loyalty. Yes, it does mean a high level of involvement,
but it is fun and offers the possibility to increase result.
To identify a profitable
In a world
where many of our guests carry a number of Loyalty Program Cards; how do we
know which of these guests are really loyal to our brand? In a commercial
world, it is important to identify the loyal customers that impact result
positively, as many times these customers are usually the ones that are paying
the lowest rate. I often hear hotels identifying their best customers by the
number of times they visit the bar or restaurant, with which they see prove
that their loyal guests also are profitable guests. This might be true; it
might also be compared to my favorite clothing store. It has clothes that match
my taste and is located within five minutes walking distance from home, which
means that my husband and I visit the shop regularly. The shop owner identifies
us as one of his most loyal customers and often gives us an additional discount
when we do make a purchase. Though, I doubt that we are the most profitable
customers, as we usually only buy the articles the shop offers on Sale.
way to identify a profitable loyal customer is to have your statistics in
order. This gives you the opportunity to not only calculate the Total Revenue
per customer and per Market Segment, it also gives you the opportunity to match
your offer to each individual market segment, right down to matching it to each
individual customer. What does a certain group of customers value the most?
What are they willing to pay for this? How can I make sure that I offer what
Loyalty programs can be used, but make sure that
these types of programs do give you the additional loyal guests and
increased revenue you desire. Take into account the fact that there is a
- Involve your guests by using Social Media
strategically. Do not only use these platforms to only inform your
customers about your offers. Involve them by asking them questions and to
encourage them to write reviews about all your products. Make sure to
react on all reviews.
- Make sure you have your statistics in order and find
out how to create profitable customers.
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RecruitmentPosted by Annemarie Gubanski Dec 12, 2013 18:02:58
The art of Recruitment
Recruiting is vital for the success
of your business, it is not always too easy as you not only are looking for the
perfect candidate; the perfect candidate will have to be looking for new
challenges at the right time as well. Recruiting a Revenue Manager is extra
challenging, as the image of what a Revenue Manager does can differ from hotel
to hotel. Many recruiting companies find Revenue Management recruitment to be
one of the most challenging requests they receive, as the job description
differs from customer to customer. Also, a Revenue Manager should ideally be
strong on four competences; Analytical, Commercial, Technical and Communication,
though not all these four competences are vital for all properties
Your Revenue Manager’s Competences
Yes, the ideal Revenue Manager has a
strong development on all four competences, depending on the property; your new
employee could have a different Skill Package. The following factors can be
taken into account
Why are you
looking for a Revenue Manager? Is it a new position or is it a replacement from
a previous Revenue Manager?
What are your
expectations? Are you expecting to be able to increase your result and if so;
what is your budget?
What are the
strengths and weaknesses of the rest of the teams your Revenue Manager will
take part in? The four competences are vital for all members within the
Management Team but each individual has his/her own strengths and development
areas. Which competences should the new candidate have for the team to be in
What is the level
of knowledge you require from your Revenue Manager? Are you looking for an
experienced Revenue Manager or would you prefer your new employee to be more
junior and take care of his/her development yourself?
The personal skills
Anyone that likes their profession
has the possibility to be great at it. In the recruitment processes I perform,
finding this enthusiasm is one of the first things I look for. This usually is
combined with connecting the right type of property to the candidates. Does the
Revenue Manager want to work for a chain or a privately held property and which
of these choices is best for his/her personal development? What is the
atmosphere within the team and does this fit both personal skills as personal
preferences of the new employee? What are the expectations does the new
employer have and how do the candidates strengths and weaknesses correspond to
these expectations? In order to make sure that recruitment is done properly, I
find that an assessment is the best option to find the right candidate. This is
an investment that usually makes sense as the candidate can be tested both on
knowledge as well as on personal skills.
The Experience Level
Many properties choose a less
experienced Revenue Manager or perform an internal recruitment as this might
save expenses on wages as well as obtain the possibility to “form” the Revenue
Manager and create a base of knowledge and experience that the Revenue Manager
will benefit from. The Time Factor needs to be taken into account. Both time
spent on personal training and development of the candidate as well as the time
it takes to benefit from the full capacity of your Revenue Manager has to be
seen as an investment.
Another factor is that properties often
find themselves forced to look for a less experienced Revenue Manager is the
fact that it is much more challenging to find an experienced Revenue Manager.
The higher the level, the smaller the choice of candidates gets. Furthermore,
from this small group of perfect candidates, the new employer should hope to
find a Revenue Manager that happens to be looking for new challenges. Mostly
these candidates are not found in the regular base of Recruitment Companies,
but often come from personal networks and specialized Head Hunting’s.
The Role of a General Manager
The absolute best Revenue Managers I
have come across in my career all have one thing in common; a great General
Manager with a solid knowledge of what Revenue Management means. No matter how
experienced a Revenue Manager is, they all need personal development and a
sounding board from their immediate superior. As the correct place for a
Revenue Manager is within the Management Team, this is most likely to be the
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Revenue ManagementPosted by Annemarie Gubanski Nov 29, 2013 16:35:42
The art of Pricing
Pricing strategies during low demand
periods are about of the most usual requirements I receive. Usually followed up
with the question on how low I consider the rate should be in order to attract
In my opinion there is a general
misconception on the power of increasing demand by lowering rates. It actually takes
demand for these kinds of pricing strategies to have its full effect. Without
demand, you risk of “simply” decreasing your room rate without the benefit of
the effect of retrieving more occupancy. It is not easy to withstand the
temptation of a quick fix when competitors in the market settle for aggressive
pricing strategies, but it is good to take into account potential damage coming
from pricing strategies.
As always, it is vital to first
calculate the total demand in your market before making a decision on rate
strategies and to analyze the full positive or
negative effect in order to form a long term winning strategy towards your
Our rate strategy is increasingly
transparent and our guests understand that it can be valuable to shop around
for deals even after the reservation has been made. This means that hotels are
faced with last minute cancellations and changes when the guest finds a better
last-minute rate. This can have a short term positive effect, as you might be
able to “steal” some of your competitor’s guests. The risk lies in the fact
that you might face last minute changes on your existing reservations. Not to
mention guest complaints when they find that the exact room they booked earlier
now is for sale at a cheaper rate. Furthermore, as we previously stated; we
need to be able to forecast the total demand on a specific period in order to
determine our rate strategies and for us to make a good forecast, we need to
have reservations. How are you ever going to teach your customers to book as
early as possible? Especially when you punish the early bookers by offering
cheaper rates to those that book last minute.
It is not
easy to withstand the temptation when competitors in the market settle for last
minute campaigns. This can be avoided by offering Early Book Rates instead.
This way you will be able to maintain a high integrity level towards your
customers and avoid last minute drop outs.
important, if not more important, as the focus on Low Demand Periods, is the
focus on High Demand Days. This is the time when properties have the
opportunity to really increase their result. This can be obtained through a combination
of the optimal marketing mix and public rate strategies. Usually we see that
the price sensitivity decreases when arrival date is coming closer. This counts
for first point of booking. Guests that already have booked and continue to
search for last minute deals still are considered to have a long lead time. The
trick is to be able to offer availability when the less price sensitive guests start
to book. For High Demand Days, your focus lies on Displacement Calculations. This
means that you analyze the reservations you were not able to take because you
already were fully booked. If the ADR of these reservations is higher than the
ADR you have on the books, there is potential to increase your result.
Shoulder Night Strategies
Shoulder Nights are the nights where
demand is reasonably high. With the right strategies in place, you have the
chance to achieve 100% occupancy and focus on these nights can give you a good
revenue growth. Also here, focus on Displacement is vital. Many properties find
that their displaced reservations depend on the fact that high demand days, in
conjunction to these Shoulder Nights, were fully booked at an earlier stage.
Here rate strategies can be all about positioning correctly, set the right
restrictions throughout the whole period and aim for 100% occupancy without
losing sight on getting the right rate during these nights.
Four things to consider!
- Strategy! Think before you start. Determine the pricepoints you
are going to use for which daytypes and for which roomtypes; Distressed,
Low, Medium, Shoulder and High Demand.
- Forecast! This actually is the base to correct pricing. The
core reason behind any last minute drops in rates actually is a bad
forecast. When you expect low or medium demand; do not start out with your
highest rates, choose the pricepoint you determined for this type of day.
- Competitors! Take care to maintain the correct positioning
against your competitors but be careful when it comes to last minute
drops. If you make sure you have a base of reservations, you might not
feel the need for last minute panic strategies.
- Analyze! Make sure that your strategies have had the right
effect and find out if you could have improved even more. This is the best
way to make sure you find the best long term strategies and will beat your
competitors most days of the year.
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OrganizationPosted by Annemarie Gubanski Nov 22, 2013 22:46:19The Future Role of a Revenue Manager
After the first two articles in this series, we continue with the focus on the future role of a Revenue Manager. How will Revenue Management develop and how can a property adapt, so that the maximum result is acquired and they will keep ahead of their competitors? This is part three of a series of three articles, in which we will try to find an answer to the following questions:
- The current role of a Revenue Manager. In this article we defined that the purpose of a Revenue Manager is to use analytics in order to create the winning strategy.
- Forming a Revenue Management focused organization. After defining the role of a Revenue Manager, we used these findings to find the optimal organization
- The future role of a Revenue Manager. In an ever changing world, also the role of a Revenue Manager will change. In this article, we will find the answer to what implications these changes will have on the role of a Revenue Manager.
What do the experts say?
In Cheryl Kimes article about Total Revenue she refers to a study which she conducted in 2010 regarding the future of Revenue Management. She asked the respondents about what they thought what Revenue Management would look like in the future and in which other parts of the hotel they thought Revenue Management would be applied. “Respondents felt that in the future, Hotel Revenue Management would be more strategic in nature, would be more technology-enabled and that it would encompass all parts of the hotel. The respondents identified function space and restaurants as the most likely candidates for future applications of Revenue Management”. I believe this to be very true. Total Revenue Management can and should be part of the strategies of any property in order to ensure that increased result is being made. In future articles, I will write more about the subject of Total Revenue Management. In this article, I will limit myself to the implications for the organization and for the Revenue Manager.
During the Revenue Forum in November 2013, Idan Velleman from PowerYourRoom pointed out that Revenue Managers will become Demand- and Profit Managers and will move away from a Room Only Revenue Management effort. On the same Revenue Forum, Kim van den Wijngaard from Olery pointed out that Social Media already has a large impact on our Revenue Management strategies. There are studies done about the impact of Social Media on our result and on the possibility to attract more reservations coming in to our own website.
Cornell University published in November 2012 the outcome of their research: The Impact of Social Media on Lodging Performance, where they stated that “data from Travelocity illustrate that if a hotel increases its review scores by 1 point on a 5-point scale the hotel can increase its price by 11.2 % and still maintain the same occupancy or market share.” In the same report it is concluded that “a 1-percent reputation improvement leads up to a 1.42-percent increase in revenue per available room (RevPAR).” In other words; focus on Reputation Management together with the ability to give high quality service, generates reservations and revenue!
Jennifer Davies from Expedia says that “On Expedia.com, good reviews of 4.0 or 5.0 generate more than double the conversion of a review of 1.0 – 2.9,” Research that Micros published in April 2013 on How a Higher TripAdvisor Ranking Can Help Hotels Book More Room Nights has the following findings:
Properties ranked 20 see 10% more directly booked room nights p/month vs those ranked 40
Properties ranked 10 see 10% more directly booked room nights p/month vs those ranked 20
Properties ranked 5 see 9% more directly booked room nights p/month vs those ranked 10
Properties ranked 2 see 7% more directly booked room nights p/month vs those ranked 5
Properties ranked 1 see 11% more directly booked room nights p/month vs those ranked 2
The graph illustrates the importance of being on top. So; a great number of good reviews do not only generate Revenue, they generate Reservations. Do well and you will be able to attract more reservations coming through your own website; in most cases the cheapest channel you will be able to find!
The future is here!
I agree with the statement that the future of Revenue Management will be more focused on strategy, technology and applying Revenue Management on other departments. There already is a shift from hotels and hotel chains that is starting to extend the responsibility of the Revenue Management to the Function Spaces, however; I do not see properties to be massively moving to apply Revenue Management in their restaurants, which I consider to be a shame. I believe this is mostly because Restaurants are considered to be a service and not as the money making department it can be. There is no reason why the F&B Department should not contribute to the properties income more.
When it comes to technology, the shift is all about moving from Property Based systems to Cloud Based. On the Revenue Forum in Amsterdam, Thomas Broos from Van Hessen talked about the implications of this shift. He pointed out that today’s youngest generation will not know what a laptop looks like once they grow up. Developments in hotel systems are all done in the Cloud. Although we still are still not able to compile all our internal and external systems in one big database, the move towards The Cloud does mean that we are heading in the right direction. Imagine updating your PMS, OTA’s, Yield System and forecast from your Mobile Device. It will come! It does mean that we all should take this into account when purchasing any new technology. Think Cloud and skip Property Based! We have the knowledge, technology is moving in the right direction; why wait?
Challenges and Opportunities
The implication of the shift towards Total Revenue Management and Profit Management involves increased knowledge on the application of Revenue Management on departments other than Room. But not only training is of an essence. To an even greater extend staff members of all departments will have to be aware of the implications on their daily tasks. In many cases, a Revenue Management project on a property starts with making sure that all heads of department are aware of the changes the implementation of Revenue Management on their department. This can either be the fear of not being able to handle an increase in responsibilities on an already overloaded schedule, or the fear to delegate a certain responsibility to somebody else. The trick is to address these fears and make sure that the project involves increased knowledge and challenges to everybody.
I would advise you to take good care of the job description for your current or future Revenue Manager and keep in mind that, as I wrote in the first article “The Current Role of a Revenue Manager” in this series; there is a difference between a Revenue Manager and a Channel Manager.
Read the previous articles “The current role of a Revenue Manager” and “Forming a Revenue Management focused organization”
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OrganizationPosted by Annemarie Gubanski Nov 18, 2013 14:45:42
Forming a Revenue Management focused
After the first article in this
series, we continue with an analysis on how to create a Revenue Management
focused property. This is part two of a series of three articles, in which we
will try to find an answer to the following questions:
- The current role of
a Revenue Manager. In this article we defined that the purpose of a Revenue Manager is to
use analytics in order to create the winning strategy.
- Forming a Revenue
Management focused organization. Now we defined the role and skills of a Revenue
Manager, we will see if we can use these findings to form the optimal Revenue
Management oriented organizational schedule
- The future role of
a Revenue Manager. In an ever changing world, even the role of a Revenue Manager will
change. In this article, we will find the answer to the future role of a
Revenue Manager and what implications this might have.
Management within the organization
Revenue Management is not a
one-person job, reserved only for the Revenue Manager. Revenue Management
involves forming the best strategy by analyzing result. For a strategy to have
its effect, every department within the property should not only know about it,
they should also apply the same strategy.
At the same time, forming a strategy
is not only a job for the Revenue Manager. All relevant departments are
involved in the decision making. The difference is that a Revenue Manager bases
the strategy mostly on analyzing the result. To demonstrate what I mean I
usually draw the following picture on a whiteboard. This is a picture of the
The hands and feet stand for the Operational departments.
They are increasingly important as most of the comments made on Social Media
are about Operations. The heart stands for all decisions
we make based on feelings. For instance, it can feel right for the Group Sales
Department to contract a large group and give a discount in order to assure the
business. The head symbolizes the brain, or
the analytical part of the organization. For instance; analysis that shows that
a particular group should not be contracted against a rebate, as we expect to
be able to book an equal amount of individual guests against full price.
We humans base most of our decisions
on feelings. The analyzing part usually comes later. For instance, when we are
hungry and see a snackbar close by, we could go in there and order ourselves a
huge plate of French Fries. The notice that a salad would have been the healthy
and less fattening option usually comes afterwards. As Revenue Management
stands for the analytical part of decision making, it is good to take time to
listen to analytics before making the decision.
The role of the General Manager
The General Manager is essential in
order to guarantee success. I usually describe a Revenue Manager to be this negative
and nagging person. With this I do not mean that we are negative, rather that we
always calculate the loss of a certain piece of business. As we work with a
fixed capacity, this becomes increasingly important during days and periods
with high demand. We just do not like to see a space occupied by a guest paying
20% less than the rate we could have sold this space for. We focus on the 20%
loss (displacement) instead of the 80% income. This means that you can expect
us to be skeptical against any high producing contract, when we see that a
great deal of this production lies in weekdays or periods in which we expect
high demand. This goes right against the rules of negotiation; increase your volume
and we increase your discount.
At the time the contract is being
signed, the property has not yet experienced the demand the Revenue Manager is
expecting for this certain period. Practically, you see unused space when the
Revenue Manager already states that this space is going to be filled somewhere
in the future. At that time, it is good to remember that a Revenue Managers
role is to know about Lead Times and Expected Demand.
As Revenue Management comes with the
need for a certain mandate to be able to direct the properties strategies, a
Revenue Manager should be placed in the Management Team. This means that a
Revenue Manager is reporting directly to the General Manager. This, in its
turn, means that a General Manager should understand the principals of Revenue
Management, in order to support the Revenue Manager sufficiently.
The organizational schedule
In order to assure there is a
dynamic discussion regarding Occupancy versus Rate and Long Term versus Short
Term, it is strongly discouraged to put a Revenue Manager under a Sales Manager
or under an individual that does not have a profound knowledge of Revenue
Management. As said; as a Revenue Manager has an active part in deciding on the
strategies of the property, he/she is preferably part of the Management Team.
For several reasons, a General Manager might like to keep their Management Team
slimmed and chooses to have one representative for the Commercial Team. In this
case, the Commercial Manager, being the head of all commercial departments,
should have a profound knowledge of all different fields of work including
Read the previous article “The current
role of a Revenue Manager” and the next article in this series; “The Future
role of a Revenue Manager”
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OrganizationPosted by Annemarie Gubanski Nov 13, 2013 15:41:20
What is the current role of a
As the job description of a Revenue
Manager can differ depending on where you work, it is not easy to define the
current role of a Revenue Manager. It is important, as it not only has an
implication on our image of a Revenue Manager, but also on training needs,
recruitment, the organizational schedule and even development within Revenue
Management. In three subsequent articles we will try to find an answer to the
- What is the current
role of a Revenue Manager? In this article we will define the purpose of a
Revenue Manager and match this to the day to day routines of this role.
- Forming a Revenue
Management focused organization. When we define the role of a Revenue Manager, we will
use these findings to find the correct place within the organization
- What is the future
role of a Revenue Manager? In an ever changing world, also the role of a Revenue
Manager will change. In this article, we will define what implications these
changes have on the role of a Revenue Manager.
The purpose of Revenue Management
Let us start with the definitions of
Revenue Management. The classic definition of Revenue Management comes from Robert Cross, the author of
the bestselling book “Revenue Management, Hard-Core Tactics for market
Domination”: “Sell the right space at the right price at the right time to the
right customer”. Later on, the evolution of distribution channels prompted us
to add “at The Right Channel”. This is the most known definition of Revenue
Management. Although this definition is easy to remember, it does not cover a
good job description of a Revenue Manager. A more accurate definition can be
found on Wikipedia: “Revenue Management is the application of disciplined
analytics that predict consumer behavior at the micro-market level and optimize
product availability and price to maximize revenue growth.” Though much harder
to remember, this highlights words like Analytics, Predict Consumer Behavior
and Optimize Product Availability. It therewith comes closer to what a Revenue
Manager actually is supposed to do.
describe the definition found on Wikipedia to be more actual, you
can describe a Revenue Manager as a person combining a commercial talent with a
love for numbers. We must have a brain for mathematics, as making calculations
is part of our day to day routine. The thing that makes a good Revenue Manager
is the ability to apply a calculation and an analysis in a commercial matter.
This does not sound like too much of a revelation, but all too often analysis
ends with a conclusion only. Making a commercial analysis means that you take
it a step further and apply the conclusion in such a matter that it results
into increased profitability.
Our main purpose is to determine the
strategies that will increase revenue. We do this by analyzing our result and
apply this to the commercial functions of the property. A Revenue Manager is
responsible for the total revenue of his or her department. So, a Revenue
Managers responsible for Rooms Division should have control over all
reservations that involve rooms. This includes contracts and group business. A
Revenue Manager that is not able to control anything other than the public
rates is called a Channel Manager. These are two different capacities.
The four competences of a Revenue
A Revenue Manager needs to have
great Analytic, Commercial, Technical and Communication Skills.
As analysis is the core of our work,
analytical skills are a must. As we also concluded earlier, we will need to
apply this analysis in a commercial way. This means that we will need to have
the ability to use our analysis in such a way that it increases profitability.
As we are responsible for the total
revenue of our department, we are very tightly bound to all commercial
departments, such as Sales and Marketing. This means that we need to have good
understanding of what these departments need and how they work.
As we are depending on various
different systems and even see us forced to produce a great number of analyzing
tools ourselves, a technical ability is vital to become a good Revenue Manager.
One perception of a Revenue Manager
is this person that sits in the office and produces Excel sheets. We need to be
able to communicate the best strategy in order to make sure that the strategy
is executed. As we stand at the basis of strategic decisions, it is vital that
all departments within the property are properly informed in order for
strategies to get their full impact.
A Revenue Manager that has strong analytic,
commercial and technical abilities is a good Revenue Manager. The difference
between a good Revenue Manager and a great Revenue Manager is the ability to
A day in the life of a Revenue
This is not easy to describe, as the
day to day routine of a Revenue Manager not only depends on the current
workload, but also differs from property to property. Above any property
specific tasks, a regular routine of a Revenue Manager usually include:
Analysis of Benchmarking
and forecast Total Demand
and need of Marketing campaigns
Factors and Overbooking levels
Keeping track of
Make sure rate
strategies are communicated both internally as on the various channels
and other lost business
As you can see, Revenue Managers
focus on quite a number of details. As we previously concluded; a great Revenue
Manager distinguishes him/herself from a good Revenue Manager by being able to
communicate clearly. From these numbers of details, we should be form a
strategy that is easy to understand and easy to communicate.
General misconceptions about Revenue
are four, what I consider to be, misconceptions I regularly come across when I
visit the properties that acquire my help to form a Revenue Management focused organization.
1: Revenue Managers only take care of the Booking Channels
Updating and optimizing the various
Distribution Channels is a different function, generally referred to as
Distribution Management. Distribution Management and Revenue Management are two
different capacities, though the one cannot function well without the other.
The function of Revenue Management is to form strategies that increase revenue
income by analyzing our result. Channel Management is our way to communicate
our rate strategies to the applicable markets. This can be done by a Revenue
Manager or by a function that works closely with the Revenue Manager, for
example a Channel Manager.
2: Revenue Managers are only responsible for the public rates
This usually is a direct result from
misconception no 1. The most optimal use of a Revenue Manager is to make him/her
responsible for the total Revenue income of the department he/she is
responsible for (for instance Rooms Division, Restaurant, Meeting Facilities,
etc.). As all contracted rates and group rates also have an impact on the
result of these individual departments, Revenue Management should be involved
in the volume, specifics and rate of these departments. The level of
involvement and cooperation between the different departments can differ from
property to property.
3: Revenue Management should be above Sales
This comes from the knowledge that
Revenue Management never should be placed under Sales or Marketing. In the second
article in this series about the forming of a Revenue Management focused
organization, we will discuss this point into further detail. In my experience,
the optimal way is to place commercial departments such as Marketing, Sales and
Revenue Management on the same level. You should take care that all individuals
are equally strong and can come to terms with each other. When a General
Manager wants to slim down the Management Team and applies one person who is
responsible for the commercial decisions, it is vital that this person has a
profound knowledge about Revenue Management and understands the analytics
behind a Revenue Managers reasoning.
4: Revenue Managers only care about short term result
Short term result is great. Long
term result is always best and should be the focus of any member of the
commercial team. As it is the focus of a Revenue Manager to increase revenue on
all market segments for which we try to find the optimal rate and production,
all rates and conditions are questioned. My experience is that the
communication level usually is the core of the issue. Questioning decisions usually
gives the best result and these discussions are best done by individuals that
are equally strong. More about this in my next article!
Read the next articles in this
series: “Forming a Revenue Management oriented organization” and “The Future
role of a Revenue Manager”
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