Dealing with uncertainty made hotel revenue management more challenging during the COVID-19 pandemic to say the least. Ironically, the majority of franchisors, management companies, and independent ownership groups were more likely to maintain revenue management talent over sales and marketing talent during the height of the pandemic, while revenues were simultaneously at their least.
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At first, this seemed counterintuitive to the authors. Without revenues to manage, why bother?
We set out to chat with as many revenue managers as we could for the purpose of this article. Over thirty responded to our request to chat at various levels of depth. One common theme was that the majority seemed fearful to go out on a limb as no one is yet quite sure of the enduring impacts of the pandemic. And, another common theme, quite different from pre-COVID-19 times, was the request for anonymity in many cases. Here, we will attempt to summarize the overarching comments.
Several regional revenue managers for major hotel franchisors (speaking with the condition of anonymity) indicated that their goal during the pandemic was to make sure they did not rush to discount and kept rate integrity among the incoming bookings as strongly as they could. Faced with limited operations in some markets and outright hotel closures in others, ownership/leadership insisted throughout the pandemic to keep revenue management professionals on board.
The authors got the impression that revenue talent was kept on board to maximize the small stream to help pay the bills. One revenue manager in this group stated, “The speed at which had to operate, analyze, predict, change, and forecast was incredibly fast. At the height of the pandemic, my goal was to help pay the mortgage and keep the lights on.”
Another theme among respondents is that history is not repeating itself. The historical pre-COVID-19-data ceased to provide the basis to draw a roadmap, resulting in revenue managers investigating different data points and approaching pricing with the most creatively in recent memory. According to David Viteri, owner of Viteri Marketing, “The most creative revenue strategies were deployed across hotels during the pandemic – hotels of every size. These included focused short-term price structures for those able to travel, relationship building, flexibility, and ongoing almost 24/7 monitoring of local and regional changes.”
The short-term impact on revenue management changes has been the overwhelming theme in feedback from the multiple revenue managers contacted for this article. Cody Locke, director of accounts at Forbes Hamilton Hotel Management Company said it’s a fluid process adding, “We look a lot at 2019 which was a top performance year across our portfolio. “We are continually analyzing STR Global data, the competitive set participants, our rates compared to the proper competitive sets, and then start over again. In the end, we simply want to be the best on the STR reports.”
The authors agree that this is a common trend among revenue managers – that the cycle of time to evaluate and re-evaluate keeps shrinking. Several conversations indicated that it is something akin to the changes in sales bookings where historically clients booked 12-24 months out, then 6-12 months, and now within the same month. Further, we historically looked at 60-, 90-, and 120-day forecasts. Now, even weekly forecasts are updated multiple times per day.
Of similar opinion, Howard Copen, director of revenue management at the 432-room San Manuel Casino in Highland, California, also felt that the pressure is extremely high to predict, change, and move at lightning speed. “Revenue managers need to focus on real time data and do a better job than ever before yielding in real time. Events are getting canceled or rescheduled often within days of their initial booking.
COVID cancellation policies for both leisure travelers and group business have made it almost impossible to forecast for the long term and/or simultaneously predict accurate demand patterns.” Continues Copen, “Overall, my message would be to learn to adapt and make sure the voice of the revenue manager is heard at the executive table…you are usually the only one studying reservation patterns by segment combined with historical data.”