Revenue disciplines, expectations evolving in hotels
 
Revenue disciplines, expectations evolving in hotels
27 JUNE 2018 8:12 AM

As automation and innovations make the day-to-day rate maintenance part of revenue managers’ jobs less of a focus, those who work in the revenue discipline are expected to have more of a strategic focus, according to experts. The shift is also growing the number of possibilities for people who work in the revenue field.

HOUSTON—The recurring theme for revenue management over the past few years is the rise of automation and the shift of revenue managers away from being day-to-day rate managers to more forward-looking rate strategists.

But a group of revenue-focused executives speaking to Hotel News Now in conjunction with HSMAI’s 2018 Revenue Optimization Conference said that evolution has continued to the point that there is now room for different levels within the discipline.

Kathleen Cullen, SVP of revenue and distribution for Two Roads Hospitality, said things have changed to the point that the title “revenue manager” might not even apply anymore.

“Instead of revenue managers, there should be revenue strategists or strategic leaders of revenue optimization,” she said. “More and more companies understand that.”

She said the discipline has seen a significant amount of evolution over the past five years, which has helped the industry continue to grow performance metrics for a sustained period.

“There’s been more and more investment in the field in terms of people, education, support and resources,” she said. “(Five years ago) it was truly a discipline of one (person) or less. Now it’s becoming more of a discipline of one or more.”

Tim Wiersma, VP of revenue management at Red Roof,* said it’s more important than ever that those in the revenue discipline have the ability to synthesize and express data in a useful way.

“It’s gone from them being more inventory managers to bringing information to the table and interpreting that data to come up with strong suggestions,” he said.

He noted the growing importance of revenue management has made it a large component in what value brands provide to individual properties.

“We have to be strategists for our owners,” he said. “And we have to make sure we’re coming up with sound strategies.”

Leadership in revenue management
Gone are the days of revenue managers being number crunchers holed up in their offices away from everyone else on property, said Linda Gulrajani, VP of revenue strategy and distribution for Marcus Hotels & Resorts. Now revenue managers are a hub for information that helps drive decisions for a property’s management team.

“(Revenue managers) are really the ones who help the rest of the team in a hotel collaborate together,” she said.

For that reason, more and more hotel companies are looking to those in the revenue discipline as thought leaders, often overseeing long-established functions like sales and marketing, said Bob Gilbert, president and CEO of HSMAI.

Calvin Anderson, chief of revenue optimization for RLH Corporation, said his company is one with that kind of structure, and he said RLHC also splits up its revenue leadership with him overseeing sales and revenue generation and another person in charge of the more technical aspects like systems and distribution.

“That allows me to focus on analytics and flow,” he said.

Greater ownership interest
Cullen said another significant change in the discipline is a greater level of involvement from owners in revenue strategy and how revenue managers are now perhaps the key team member for linking owners and asset managers with on-property operations.

“There’s a high expectation level that the revenue person is at the table in all owner discussions compared to five years ago,” he said. “And owners have hired revenue experts in their own organizations. They understand the importance of it.”

Karen McWilliams, VP of revenue strategy for Concord Hospitality, said communication between revenue experts and owners is increasingly critical and her company has adopted the practice of giving large ownership groups weekly top-line revenue reviews. She said ultimately this builds a level of trust between revenue teams and owners that leads to less second-guessing on strategic decisions.

“There’s far more trust,” she said. “It lets (revenue managers) spread their wings more without having to explain every step of the way.”

Wiersma said that relationship building is also key because it helps avoid issues where owners misunderstand data and come to the wrong conclusions.

“We’ve seen really good progress,” he said. “In the past, an owner might see some small piece of information and interpret it the wrong way. Now they can look at the bigger picture.”

*Correction, 28 June 2018: A previous version of this story included an incorrect title for Red Roof's Tim Wiersma.

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