Revenue Managers are still not being paid as well as many of their colleagues. Yet, it is hard to argue with the notion that Revenue Management is now the most “mission critical” function in the hotel business. RM sits at the crossroads of the strategic and tactical decision making process for every single department in a hotel.
Next to the GM, Revenue Managers should be the highest paid employees in a hotel company. In fact, the RM’s job is so close in significance to the GM’s that, in most properties with limited resources, the RM is the GM.
Today, if any hotel manager wants to make a pricing or promotion decision, they would be wise to consult with RM first, not only to validate their assumptions, but also to gain guidance on the feasibility of their plan. The same cannot be said about any other function. Let me give you a few examples.
1. For Finance
RM has taken the bulk of the significant revenue planning responsibility away from Finance. The DORM at most properties now has more forward looking data about demand patterns and guest behavior than the DOFA. Sure, at many properties, Finance is still off doing budgets and forecasts in a silo without the input of RM, but that type of planning is so disconnected from the everyday revenue strategy process that it is quickly becoming obsolete. Finance now takes the lead from RM in every process involving putting together predictive information that impacts financial planning.
2. For Marketing
In a digitized channel environment, the decision of when and where to publish promotions has to be very precise. Hotel marketing now relies on RM to dictate when a property’s demand cycle calls for promotions or additional impressions. In recent years, RM has taken much of the punch away from marketing. In the past, it was common to see the RM reporting into the head of Sales and Marketing. In years to come, it may not be unusual to see Marketing reporting to RM.
3. For Group Sales
Unless the Sales department at your property has a blanket “run-of-the-house” policy, they are usually dependent on RM for guidance on offer rates, negotiation parameters, and capacity limits. RM is now intimately involved in the Group Sales cycle since it impacts every aspect of rate setting and revenue optimization. I don’t know of any property where Sales is telling RM what to do. It’s always the other way around.
4. For e-commerce
Those properties that are running e-commerce as a separate department are quickly learning that conversion rates on their website are almost completely dependent on the RM strategy. While you can optimize SEO and navigation, your sites ability to create customers will ultimately depend on your pricing scheme. In fact, at some very forward thinking hotel companies, conversion rates are becoming an additional compensation metric for RM.
Read full article at: Origin World Labs
