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The Revenue Manager of the Future

We have confirmed that the hotel revenue management is constantly evolving and in this article Hotel Business Review offers a list of skills that describe a revenue manager. This is a list based on Sherri Kimes’ research from Cornell University and Kelly McGuire’s experience from the SAS Institute.

Here the list of skills for the revenue manager:

Analytical: revenue management is a science and even if we are now surrounded by new revenue management software, we still need the person who understands the results, who is able to translate them and to create the right strategy. Someone who really comprehends numbers and statistics.

Good communication skills: the revenue manager is a “geek who can speak” (S. Kimes), because it is essential to be able to explain, sometimes complex strategies, to the rest of the team, who does not speak “numbers, analysis and statistics”. This person needs to clarify the importance of concepts, of actions taken and at the same time be able to be influential and successful.

Data-minded: it is critical that the data are understood – their origins, their reasons to be, their strengths and weaknesses and gathered and analysed to develop the successful strategy.

Technology-savvy: the revenue manager needs to have a technical knowledge, to be able to deal with the hotel software, their integrations. He/she needs to have a good expertise on web page and social media as well as new mobile applications.

Negotiator: the revenue management is not only for hotel rooms, but all the departments that bring revenue to the property. Working very closely with the marketing team, the revenue manager becomes the middle person between the operations and the management, working in […]“political waters to drive results”[…]

Education: courses and trainings in revenue management are really important, they give the right fundamentals to the coming experience, to grow in the right direction.

To conclude, revenue managers need to be really empowered and free to make decisions, they need a good knowledge of numbers, statistics, technology, but they need some operations background.

Hotel managers need to create new incentives for the sales team, no longer based on volume!

Cluster offices are not always the right solutions.

Technology is essential nowadays and we need to stay on top of it to be more competitive.

Just one simple fact experienced lately. I have been talking with a lot of people, from the hospitality industry, and many of them, after I stated my profession, have smiled at me and said that they are doing “revenue” since the beginning of the millennium. It sounded really interesting, and then I asked what they meant and the answer was, “we open and close rates and availability many times during the day”. Still confused I asked “what else?”. During the various conversations, I have realised that there is still a little misunderstanding on how the roles are covered among the departments of sales, marketing, reservations, even front office and the management itself, everybody is doing something that should be part of the revenue manager’s job description!

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Hotel Revenue Management – Future and Past

I have recently noticed that revenue management is no longer a profession and a science, it is the new social conversation “talking about the weather” for people in the hospitality industry. Everybody has suggestions to offer on how we need to run the hotel, but nobody would speak up in meeting when opinions and ideas are asked.

You get your coffee in the canteen and the HR Director is talking about increasing rates because the hotel next door is selling higher – she knows it for a fact. (Yes, but it is a 5 star deluxe and we are not!) You have your lunch and the security guy is telling the porter that we definitely need to pay more attention to our promotions, we do not have enough, because the beautiful hotel down the road has at least ten and they are always full! (not really, they have tons of promotions because they are always empty and the rates are really low!)And again the restaurant manager thinks that our menus are too cheap, because we get very cheap clients who do not leave any tips for the staff, we need to increase the prices to get more reach people, who spent and leave tips like the restaurant around the corner. (yes, they are a 1 star Michelin!). The Financial controller wants to increase rates because we get more money. I have never paid too much attention, when I get my lunch or coffee, I usually take these few minutes to relax, but one day it really hit me…colleagues of any department are just talking about the weather, they do not know what to say and the subject in fashion right now is revenue management.

I would love to tell them that “Rome wasn’t built in a day” and that revenue management wasn’t either… not created last year and not even the year before, that there is more to that, than to be the most expensive hotel or restaurant to get more money or “better” clients!

Remko West from Xotels answered to three simple questions on very valid points, what is the past and the future of revenue management:

First question – past vs future/present […]”What are the most important developments & strategies that have led to where we are now with revenue management?”[…]

  • The availability of information – analytic, benchmarking, reviews, no available 5-10 years ago
  • Technological developments – less manual work load and definitely more accurate
  • SoLoMo (Social-Local-Mobile) – more channels to launch promotions, to be visible in the market
  • Maintaining a healthy channel mix
  • Lowest Price Guarantees
  • Metasearch – not yet very clear to many hotels

Second question […]”What are the top changes that you expect to happen in the next 3 to 5 years in hotel revenue management?”[…]

  • Rate Parity will soon no longer exist. On contract – no legal issue? Only a marketing strategy? But the price war is not over
  • Sharing economy
  • Metasearch channels
  • Availability of data

Third question […]”Will these changes be different for chain versus independent hotels?”[…]

Not really the answer that I expected and then I give you my opinion. My answer is yes, it will be very different for independent hotels.

  • They will not have all information at their disposal, because they do not have the budget to implement their technology with all the latest software to improve data analysis.
  • They do not have a dedicated person to manage social media at the right standard.
  • They cannot compete with OTAs marketing strategies
  • Metasearch is still a word for many of them

I will be happy to hear your thoughts to achieve better results and to play fairly and at the same time to make sure that we all understand the meaning and the importance that this new “fashion” can help us all to strategise for the future of our properties!

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How will OTAs evolve in 2016?

Hospitality is a world in continued evolution and we have to keep up with it. Every day we are amazed by a new technology and we are constantly thinking of how we can make our guests’ stay an unforgettable experience, how to make our time more valuable, how to get surrounded by more professionals and experts and how all together we can improve our revenue and at the same time decrease the costs.

Evolving is part of the growth, but one question is constantly recurrent, how do the OTAs can play a smaller role in this process? How can we get to keep more of the earned revenue without bleeding commission to them?

The opinions and the suggestions on how to act to get better, more healthy and keep more money are countless, but in reality – and here not to be pessimistic – deep deep down we all know the answer and nevertheless we are all in denial. Opinions are very important, but revenue managers, financial controllers and marketing directors, as well as general managers, can read numbers and figures are not opinions, are facts.

Frederic Gonzalo, a strategic marketing consultant, briefly explains on eHotelier, the OTAs domination and their future, asking everybody to add their point of view. He presents a summary of what the OTAs have been up too in 2015. Facts that have happened between the giants of the hospitality industry. Expedia which became the biggest OTA with the acquisition of TraveloCity and Orbitz as well as HomeAway, leaving Priceline behind on the second place with its best known brand He also mentions Airbnb, TripAdvisor as well as Google’s stories.

The point is that we cannot compete with the OTAs or think to cut them out, what we need to do is to learn to live together and to accept that part of our business depends on them; they are bigger, they are stronger and definitely they have more capital to invest.

My point of view: either we try to invest as much as they do in PPC campaigns, advertisements of any kind and we know that independent properties cannot compete with that, or we save in the investment and we pay them a commission. In one way or another we have to spend to have a return of investment, it does not happen if we simply want to save. We only need to make sure that the “big boys” do not abuse their power with us.

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How to drive organic search results for hotels

SEO – Search Engine Optimisation – organic search results for hotels, something very important that in the last few years have been part of the marketing strategy in all businesses, however for many hotels’ management is still a little hazy. We all understand what it is and why it is vital to get it right, however it is still quite difficult to act on it and make it work.

We will find suggestions and strategies all over the internet, I found this article by Kerri Fivecoat-Campbell,  a HotelNewsNow contributor, very straightforward to understand. It offers a brief description from the Oxford English Dictionary definition  – “the process of maximizing the number of visitors to a particular website by ensuring that the site appears high on the list of results returned by a search engine” – up to a few suggestions to make it work.

First we have to take in consideration that the SEO is no longer what it used to be and that every year the algorithms are modified thousands of times to make sure that we keep up with our website and that we do not ignore it for too long. It is a challenge to keep up with search engines like Google, but if we want to maintain our hotel website on the top of the list we have to manage it and here a few points to achieve that:

  • Consistency is definitely one of the keys, the hotel information should be written in the same way on all pages.
  • The content is king – we need to make it interesting to engage our visitors, short but with a clear message.
  • Videos play a very important part, however they need to be of a high quality and not too long.
  • Keywords are essential and well spread out in all the pages, three to five main ones are enough.
  • The home page should have the brand promise to catch the interest of the visitor.
  • The website must be mobile friendly, as more than 60% of our potential guests, check out their next trip over the phone.

This is just the beginning, but when we get to start our strategy many other details become clearer.

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Hotel Managers and Uncontrollable Variables: How to Deal With it!

Hospitality like every other businesses needs to rely on great managers or leaders if we prefer. Someone in charge in better or worse, able to comprehend when to step up and to deal with every situation that comes along.

They need to lead their teams and consequently the business in the right direction also through difficult times. Every day is a different one and uncontrollable variables could be just around the corner.

Factors, that hotel managers meet every day and have to be prepared to handle them. Max Brass from FrontdeskAnywhere brings up a few, that managers need to be aware off, so they can be organised and do not waste any minute to keep up the good work.

Economy is a primary uncontrollable variable. If the economy is strong, hotel managers have to be able to take advantage of the situation, on the other hand, if the economy is weak, they need to be able to deal with it. For instance, if a currency is strong, hotel managers need to target the right market and fill the hotel without killing rates.

Technology goes at a very fast pace and hotel managers need to keep up with it otherwise they risk to lose business and to be left behind by the competition. Upgrades to old software are essential as well as investing in new ones. Investments are seen as initial costs, but they will create a better and more efficient working environment, hence they will increase revenue.

Keep an eye on the competition and acknowledge it helps the hotel managers to create the right strategy and try to be better than other hotels in the area.

Here just a few of the main uncontrollable factors without talking about the weather!

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