A survey of 381 hotel revenue managers worldwide by Cornell University finds a surging interest in seeing the biggest possible picture of what’s happening at their properties transactionally.
Many say they’re interested in “total hotel revenue management,” a concept that looks beyond rooms to include restaurants, room service, and meeting space rentals. About 63 percent of those surveyed expect total hotel revenue management to become common soon, where only 10 percent mentioned the concept when Cornell did a comparable study in 2010.
Both studies were done by Sheryl Kimes, a professor of operations management in the School of Hotel Administration at Cornell University.
More broadly, the latest survey finds that many revenue managers want to look beyond the traditional focus on revenue per available room. For instance, a significant percentage of survey respondents also predict that they may soon measure performance per available square foot.
One hangup that’s delaying this shift from happening is that the most popular benchmarking services from the consultancy STR Global don’t offer standardized alternative metrics.
Hotels’ internal power struggles stymie change, too. One survey respondent often sees general managers overruling them and the financial controllers with old rules of thumb (“Take last year’s numbers and add 2 percent”), rather than rely on data and the latest algorithms.
Skift asked several leading figures in hotel revenue management to comment on the survey.
A few flagged how the pace of change has not been as fast as was predicted in the last survey in 2010.
Erik Browning, VP of revenue management consulting at The Rainmaker Group, says: “I was a bit surprised that training was not mentioned by the survey respondents. If we hope to achieve total revenue management in the next five years, we have to take a good hard look at talent development….”
“In the Cornell survey, 38 percent of respondents stressed the need to be more strategic, which is akin to stating the obvious, since strategy is the very job description of a revenue manager. So, we should ask ourselves the hard questions: Are we properly analyzing the available data or are we stuck in the doldrums of simply creating reports?”
Browning insists: “It all comes back to proper training: edX, for example, has awesome courses on analytics, probability, statistics, and related topics that are completely relevant to our jobs…. As a revenue management leader, I would ask myself: ‘Do I have the right skill set – and do my team members? Have I taken steps to grow those skills?’”