One year ago, Cornell University study on “The Future of Hotel Revenue Management” by Sheryl E. Kimes was published. One thing that was striking was that the Total Revenues continued to be year after year the next area to apply Revenue Management tactics and strategies to. First, I thought it was just me paying attention to many Total RM posts and blogs from last summer. Then I remembered that even google didn’t find any recent hits on the topic a year ago. A quick search (from my location) just this week confirmed this. Articles on first pages were either from 2012 or Fall 2017.
This is just great! The more there is material available, the more we can expect this area of Revenue Management to grow both in people skills and technology. Yet, we are still at the stage where there are not that many revenue managers who have been given the authority and empowerment nor the resources to develop this area in their organisations.
In my study “The Role and Future of Hotel Revenue Management” in 2005, I found that technology has an essential role in developing the skillset of Revenue Managers. For the industry to be able to take the next step, we need better digital services to lead the development.
However, technology alone is not enough. The Total Revenue Management for a full-service hotel can no longer be on one person’s shoulders. While it should have already been in place, now is the moment to ensure the whole team and organisation is educated in the basic RM knowledge and the core team to an advanced level of Revenue Management.
Currently, there are organisations, where the power of Revenue Management has been realised and they are able to move forward into developing data and tools towards building a revenue and profit generating organisation including all departments - and as we are in the hospitality industry this naturally will consider the customer’s perspective. As you know, a happy customer brings back more happy customers and repeated business.
On the other hand, there are other type of organisations where the move towards total revenue and profit concept is somewhat hindered either by the top management’s the lack of understanding the essential role Revenue Management has in the organisation or the vision and drive by the revenue management leadership. Or perhaps purely the attitude, why should I take on more than is required of me.
Looking back how the technology development on the rooms side has had an impact in increased profits (when managed correctly), it should be a no-brainer to understand that similar ROI is possible in other departments. Starting from Step 1 it is and will be hard work, but so it was when the first steps were taken when building better processes and technologies to manage room revenues. When the F&B, events, activities and Spa businesses have more mature and wide spread solutions available, they will eventually bring the laggards onboard too - unless it is too late!
A million euro hint for owners and directors! The revenue management is the area to focus development on as once it becomes part of the organisation’s culture there is no limit to what the teams can achieve working towards a common goal and always ready to take a pro-active action based on data, customer feedback, and the market conditions. Get the best revenue skills onboard today!
Steps to get onboard on the Total Revenue Management ladder
- Have the right team members onboard - ready to learn every day and develop their know-how and market
- Coach and educate the revenue manager and each department in revenue management concept and practicalities
- See the teams work together coming up with ideas to serve the guest better, increase revenues, reduce cost for improved profits.
- Find the right software to make the daily data grinding smooth and enabling time to focus on analysing and proactively approach the future as well as ensuring more time for customer service.
Revenue Management IS the best job in the world!
I’d love to hear your thoughts!
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Hanna is one of the leading revenue professionals with nearly 20 years of experience in both global and Nordic markets. She collaborates with industry professionals and service providers to develop solutions enabling companies better serve their customers and increase revenue and profits. After the years abroad, Hanna is enthusiastically involved in developing the travel and event industry in Finland.
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