Perhaps it’s top of mind for hoteliers right now during budget season, but for far too long the hotel industry has been under-investing in the next generation of revenue managers it will need to succeed.
It’s not that hotels don’t recognize the importance of data science and analytics, but right now it’s a numbers game that they’re losing. Not enough hospitality schools have a revenue management curriculum to train enough specialists for the whole industry. Those graduates who do have a strong base of revenue management knowledge too often see other jobs inside and outside of the hotel space that offer better paths to advancement and higher pay.
Hotels need to create the demand for revenue management as a hospitality career by reconsidering how they develop and compensate their staff.
A director of revenue management getting stuck in the same development track and salary band as a director of rooms is not appropriate. But when underqualified graduates are starting out in that role, the cycle perpetuates. The way for a hotel to break out of that pattern, especially in the near term while still waiting for more universities’ revenue management curricula to catch up, is to aggressively recruit talented people for the revenue management department.
For instance, if you have to pay the DORM an additional US$20,000 per year to attract and retain a highly qualified candidate, the return on that investment could be massive. If that person is able to contribute to even a 2% increase in the hotel’s RevPAR, she’s generated far more money than that incremental US$20,000 to the bottom line.
Now is the time to elevate the role of the revenue manager, no question. A recession in the hotel industry’s cycle is likely coming, but hotels will want to find the DORM they need to compete in a down market now, to train and ramp-up that person before the hotel has to change strategy.
The upfront cost in higher salary would be meaningful. But hotels could afford it more than they could afford to let their revenue stagnate.
Contributed by Patrick Bosworth, DUETTO, San Francisco