Growing a revenue manager

-- Hotels, 2/1/2008

Revenue management is not just for the big brands, and the myth that revenue management only works for hotels running below three-quarters occupancy has been debunked. With even the smallest independent hotels starting to view revenue management as a necessity, good revenue managers can be hard to find. So where can hoteliers find that RM talent?

Donna Quadri suggests hoteliers look to their own staffs. Quadri, a clinical assistant professor at New York University’s Tisch Center for Hospitality, Tourism and Sports Management, says hoteliers are best served by grooming their own revenue managers with a company culture that supports smart booking practices, from general managers on down to the front desk. “I’m not saying you shouldn’t go outside the company,” Quadri says, “but for the long term, strategically, it’s ideal to cultivate revenue management from the ground up.”

Marriott, Starwood and Hilton are among the companies that have launched their own internal revenue management colleges to help meet their human capital needs, while smaller hotel groups are hiring third-party consultants to set up systems and give would-be revenue managers some valuable on-the-job training.

With either approach, the keys to growing a successful revenue management program are executive leadership and implementation of a quality technological platform, Quadri says. “You have to grow your own talent. You have to replace your own stars. The market out there for the best of the best may be cost prohibitive for a lot of companies,” she says.

Picking A Platform

When selecting revenue management technology, John Burns, president of Arizona-based Hospitality Technology Consulting, encourages hoteliers to seek out software that is able to sort and parse various revenue data and projections—including group sales, F&B and spa traffic—separately from transient business. Not all guests, of course, are equally valuable, and if the software cannot tell the difference, your hotel will be leaving money on the table.

Hotels that are doing revenue management manually must move to automated systems to keep up. With the proliferation of Web-based software, cost is no longer a barrier to entry for most mid-scale properties; sophisticated platforms that once cost US$150,000 or more to install can now be implemented for as little as US$100 per room per month.

That said, hoteliers with manual revenue management programs face a real challenge in convincing their personnel to trust the computers. “Going from a situation where you’re heavily hands on to one where you have to trust the numbers from a black box takes a real leap of faith,” Burns says. “But the systems have proven that they’re right a lot more often then they’re wrong.”

In terms of vendors, Burns says Amadeus, EasyRMS, Micros and JDA all offer strong revenue management technologies.

RM 2.0

Even established revenue managers using sophisticated software should be prepared to embrace change. The role of the revenue manager is rapidly evolving with the Web 2.0 revolution, warns Colorado-based hospitality revenue management consultant Carol Verret, as hoteliers are frequently assigning them the job of monitoring a hotel’s online presence.

User-generated travel review sites can make or break hotels, particularly small and non-branded ones, so diligent tracking of what is being written is crucial. “Those reviews impact a customer’s predisposition to a hotel,” Verret says. “It’s a shift in the way our customers do business with us. They’ve taken back control of the buying process.”

Web tracking need not be an arduous, time-consuming process, however. Verret points to services such as Avalon Report and Chatter Guard, which provide hotels with a dashboard summary of the hotel’s competitive Web position, along with updates on traveler comments and reviews. TravelClick’s SearchView technology offers a similar capability, and most of the major revenue management and PMS vendors are in various stages of developing this technology.