Revenue management is about selling the right product, at the right time, to the right guest, at the right price, through the right distribution channel. But what does it take to make these decisions? This strategy might seem simple, but it actually involves a lot of work that many decision-makers don’t see.
NB: This is an article from Borhen Rezgui, Revenue Manager EMEA at Choice Hotels
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It starts with auditing the business’s products and market, discussing stakeholders’ goals and objectives, and examining available resources. We analyze historical data alongside current bookings to gauge market trends and the impacts of events, and to understand the business mix.
This thorough analysis supports our forecasting, which is crucial for effective budgeting. We then set pricing and distribution strategies based on this information. Additionally, we guide marketing, sales, and technology efforts to align with these strategies, thereby maximizing business performance.
I’ve always been captivated by the analytical approach of revenue management. This passion, coupled with my habit of continuous learning, led me to pursue Data Analyst training. This experience opened my eyes to a profound realization: revenue managers are, in essence, data analysts. How so?
Let me break this down for you.
Revenue Managers as Data Analysts:
The primary role of every revenue manager is to perform analyses, provide recommendations, develop strategies, or respond to ad-hoc requests. When I embarked on my Data Analyst training, I was curious about how similar the roles of data analysts and revenue managers might be.
Data analysts follow a universal process that fits any type of data analysis: Ask, Prepare, Process, Analyze, Share, and Act. I have created an insightful infographic about this process, which you can review here.
1 – Ask Phase: This initial phase involves defining the goal of the analysis, a common starting point for both revenue managers and data analysts.
2 – Prepare Phase: Here, the focus is on collecting the necessary data. Revenue managers regularly extract data from property management systems (PMS) to build reports, similar to data analysts who often use SQL for managing larger datasets. This phase was an opportunity for me, and for anyone interested, to master an amazing tool that helps handle large amounts of data.
3 – Process Phase: Dedicated to cleaning and transforming data, this can be challenging if Excel is not your best friend! Data analysts often use more advanced tools such as R, Tableau, and Power BI. This was also an opportunity for me to enrich my skills and gain new techniques in data processing.
4 – Analyze Phase: This phase involves performing aggregations, comparisons, creating visualizations, and looking for trends and patterns. This is the main work of every revenue manager, whether analyzing pick-up, segmentation reports, or channel production. Data analysts perform similar tasks using powerful tools like Tableau and Power BI.
5 – Share Phase: When it comes to sharing findings, revenue managers do more than bring spreadsheets to their revenue meetings. In my case, I prepare presentations that include graphs, tables, and recommendations based on data insights, market trends, competitive analysis, and performance compared to the budget. Data analysts also use storytelling and interactive dashboards to make their findings compelling and understandable.
6 – Act Phase: This final phase concludes the meeting with decisions that will be implemented based on the recommendations. In today’s business world, data-driven decision-making is increasingly important, helping to instill a data-driven culture for everyone practicing revenue management.
Revenue managers are performing the four types of data analysis: you can find an insightful infographic that I created here
- Historical Analysis: This is something done by revenue managers before starting to work on a product or service in order to understand the seasonality of the activity, to identify opportunities for improvement and to set up a commercial strategy.
- Diagnostic Analysis: ad hoc analyses are commonly used by revenue managers. Learning data mining could be a wonderful opportunity for every revenue manager in the future years.
- Predictive Analysis: As revenue managers, we are performing forecasting, data by day and even by segment. In data science, there is a big opportunity, and I believe the biggest one, for every revenue manager to gain time and accuracy to perform relevant forecasts. Learning to create models, in addition to your revenue expertise, will be a valuable asset in your resume in the next few years.
- Prescriptive Analysis: This is something related to your expertise and knowledge of the market as a revenue manager, and more as a revenue growth manager (what’s the difference between revenue management and revenue growth management? Here’s a good infographic that explains this). There is also an opportunity here for those interested to gain skills in optimization and scenario simulation.
Do you see yourself differently after reading this? Believe me, there is more below, and you’ll be even more proud of yourself as a revenue manager.
Revenue Managers as Business Intelligence Analysts:
Continuing my journey in the data field, I developed a keen interest in Business Intelligence. BI involves using technology and business data to guide and inform decision-making processes.
The BI analyst is tasked with answering critical questions: “What has happened?” and “What should we do next?” Similarly, we, as revenue managers, analyze hotel data weekly and transform complex data into actionable business strategies, addressing these very questions.
The role of a BI analyst also includes the creation of dashboards that provide an overview of performance and key performance indicators. I know many of my fellow revenue managers who are creating amazing dashboards using tools like Microsoft Excel, Power BI, and Tableau.
These tools not only enhance our ability to visualize data but also allow us to present it in a way that is both accessible and actionable for decision-making.
But do revenue managers possess any more hidden talents? The answer lies below.
Revenue Managers as Business Analysts:
Is there a difference between Business Analysts and Business Intelligence Analysts? I’ve explored this question in one of my infographics, which you can access here.
Have you, as a revenue manager, ever held a meeting with an owner or a general manager to discuss their business needs and current problems? Have you analyzed these needs, along with available resources and possible solutions, both from within your existing toolkit and from the broader market?
And after presenting a detailed report filled with proposals, did you oversee the implementation of a chosen strategy and monitor its results to ensure it met their goals? If so, you’ve engaged in activities very similar to those of a business analyst.
This role involves gathering intricate details about business needs, crafting tailored solutions, and then following through with implementation and result tracking. This skill set is an invaluable part of what revenue managers bring to their hotels and clients, especially evident during hotel openings and annual strategy sessions with clients.
This capability reflects the essence of business analysis. It’s a fantastic skill that revenue managers possess, and I believe there is also a significant opportunity here for us to further develop our skills in BA, or to integrate BAs into larger revenue management teams.
Is there more? Absolutely.
Revenue managers wear many hats beyond the traditional roles we’ve discussed.
- They are also project managers, often overseeing the implementation of new PMS or RMS.
- They serve as market analysts, diligently gathering and analyzing data on events, competitive performance, and market trends.
- Additionally, they act as hospitality leaders, uniting all departments under a single strategy for total revenue management.
I could continue discussing the multifaceted role of revenue managers, but let me pause here, as too much can indeed be overwhelming. However, it was important for me to highlight the extensive work and skills involved in revenue management, the vast opportunities available to adapt to market evolutions (especially in areas like Data Science, BI, and BA) and to give a heartfelt shout-out to all of you who perform outstandingly every day behind the scenes.
I wish you all continued success, more skills and knowledge, and greater growth and profitability.
Here’s to the unsung heroes of the hospitality industry: may your efforts be as rewarding as they are challenging.
