Hotel revenue managers and general managers share a common goal: driving their hotel to achieve optimum success.
RMs work toward achieving this goal by making strategic decisions focused on maximizing hotel revenues. General managers typically take a broader approach, with their keen eye on revenues being just one portion of their big focus on success.
However, there may be times when a general manager might place value on a performance metric or a demand situation that doesn’t actually drive the highest possible revenues for the hotel. This type of misalignment between the GM and RM has the potential to not only cause disconnect within their relationship, but ultimately cost the hotel valuable revenue.
Let’s take a look at a couple of common hotel scenarios that revenue managers may face with their general managers, what skills revenue managers need to be effective, and what general managers should be looking for in their revenue managers.
Consider this situation: The hotel is in high demand for an upcoming Friday night. This scenario presents a revenue opportunity to convert some of that peak demand into higher shoulder night occupancy. Rather than accepting two nights (a peak and a shoulder night) at 85% occupancy, the general manager requests the release of any stay restrictions for Friday.
This results in a sold-out night on Friday, but causes the hotel to run at 50% occupancy on Saturday. Not only was an opportunity for higher occupancy on Saturday missed, but it also results in a loss of potential revenue over the two-day period.