The amount of data and new technology available to today’s revenue managers means hotel companies still need creative, outside-the-box thinkers to develop new and successful revenue strategies.
NASHVILLE, Tennessee—The responsibilities of hotel revenue managers continue to expand and evolve, but the core nature of the discipline isn’t threatened by the onset of technology advancements or more data, sources said.
Revenue-management executives chronicled the past, present and future of their field during “The maturing role of revenue managers” breakout session at the 2017 Hotel Data Conference. The panelists also revealed what qualities they look for in young revenue managers who aspire to be successful.
“The biggest complaint I had 20 years ago is I don’t have the data, and the biggest complaint now is I have too much. … The hardest thing is obviously be able to put it together,” said Raul Moronta, SVP of revenue management at Crescent Hotels & Resorts.
The sheer amount of data and new technology available has by and large leveled the playing field for all revenue managers.
“The only differentiator there has to do with being able to outsmart that competitor,” Moronta said. “And I think that no matter what, that will never go away, because technology … has equalized everybody the same way. … But even as technology continues to grow, people still find ways of outhustling somebody else. That passion of a revenue manager I think is what makes the difference of a successful hotel and an unsuccessful one.”
Hitesh Patel, president and CEO of Capital City Hospitality Group and vice chairman of AAHOA, said the key is to encourage creativity among revenue managers.
“It depends how much they want to get engaged, how much they want to pursue this and how dedicated they are to the company or to the hotel,” Patel said.
Today’s revenue managers should also be prepared to “wear multiple hats,” Patel said, and know as much as they can about sales and property operations beyond their own discipline.
“So it’s a triple-role hat you’re wearing as a revenue manager,” Patel said. “And if you’re embracing it, you’re succeeding. I’ve seen other companies where (revenue managers say) ‘I’m just driven on revenue, that’s all I’m told to do,’ and those companies are staying back a little bit from the guys that are thinking outside the box, they’re moving up.”
Determining and communicating strategy
When asked what consumes a revenue manager’s time most, Patel said his company has really focused on researching guest demographics and behaviors. Doing so has had an impact on sales and revenue-management strategies.
“One of our hotels, we realized that it was all seniors (who) were staying there, and while we’re targeting corporate clients, … (we realized) that’s not our consumer base, so we switched focus at that point,” Patel said. “I think the huge thing is to know what is actually driving the revenue that’s coming to your hotel, what’s that market group? And I think if you cater to that group, you go a lot further … the hotel next door might have different groups that are coming to their hotel versus your hotel, so make sure you know who your customer base is.”
Moronta said trying a new revenue-management strategy should rely on low-risk, high-reward principles.
“What I actually tell the team is that you want to be in a situation where you have high learning, low liability,” he said, “meaning I want to be able to test these (rates) in a test environment that I know that whatever happens, you’re going to have that outcome. … You have to give them the ability to fail safely and to know that everybody is backing you at failing if that is the case.”
On the communication front, Michele Mainelli, SVP of revenue management for Island Hospitality Management, said she advises her revenue managers to prepare highlights of their reports that are more digestible to GMs and owners.
“We need to train them to know when to think outside the box and bring other material into their calls, not just that one package of information,” Mainelli said. “… When they first start, obviously they’re a little nervous, they’ve never talked to a GM, they’re now communicating with the GMs all the time, and they would just read the reports. We have now begun training them to look at those reports a day ahead, (and) identify at least three main focus points for that call that they are going to introduce.”
Takeaways going forward
The panelists agreed that automation will continue to grow in the hotel industry, but Moronta said human processing and decision-making is still invaluable to revenue management.
“A lot of our hotels have this five-year period, either a five-year goal that you’re going to sell it, or five-year renovation process, but at some point the repositioning of an asset requires the human intervention,” he said. “No machine can reposition an asset. Because of that, I think that the value an individual provides now in revenue management is far greater than what it used to be in the industry.”
Mainelli said her best advice is to continue to set benchmarks for performance in every facet of your business.
“Always be thinking of how you’re going to outperform your previous performance,” she said. “Not even just the prior year, but the previous month, the previous week, even the previous day. When you have an event, are you already looking forward to how you’re going to run that same event? If it’s year over year, how you’re going to run it next year and outperform what you did this year? … You should always try to be trying to outperform your previous performance. It’s a game, … and it’s being competitive and wanting to win.”