While revenue managers can often be pigeonholed as nerdy numbers guys in the back office, once they start pulling levers and driving significant revenue, they’re often the coolest kid on the block.
All of a sudden everyone wants to hang out in the revenue manager’s office.
But it’s no longer enough for the revenue leader to only know about yielding room rates; now they must be able to use those same pricing analytics to improve digital marketing and other revenue efforts, according to owners and asset managers on a panel at HSMAI’s Revenue Optimization Conference in Houston last week.
“What’s cool today is being able to really dig in and affect everything on the top line,” said Chris Nixon, Vice President of Revenue Optimization for Ashford. “How are you quoting groups? How do you stimulate lead volume?
“RM is no longer cool, but when it’s coupled with expertise in these other areas you can be a cool kid again.”
Not only that, but you’ll suddenly be the owner’s best friend. Believe it or not, owners and hotel revenue teams are really shooting for the same goals.
[bctt tweet="#Hotel revenue management is no longer cool, but when it’s coupled with expertise in these other areas you can be a cool kid again.” – Chris Nixon, @AshfordTrust, at #HSMAIROC" username="DuettoCloud"]
“The name of this conference — optimizing revenue — is what the goal of hotel ownership is all about: value optimization of their asset,” said Bob Hayward, Senior Vice President at CHMWarnick. “Ownership wants to be assured that their asset is attracting the most profitable business, maximizing its share of business and achieving its appropriate position in marketplace.”
“To drive asset value, we have to drive bottom line,” added Liz Perkins, Senior Vice President of Corporate Strategy and Reporting for Apple REIT. “The only way to grow bottom line is to take the most profitable business and understand what the net value of that business is.”
Perkins said the digital ecosystem is changing so fast that understanding what levers to pull when can be the difference between hitting and missing numbers. For this reason, Apple looks to its revenue teams as leaders, not followers, she said.
Effectively Communicate Revenue Goals
To get the most production out of their operating teams, hotel owners must clearly communicate their long-term strategy for the asset. This type of transparency will not only put clear goals in front of your team, it will help them make the right hotel Revenue Strategy decisions.
Unfortunately, those conversations aren’t happening today, panelists agreed.
“Ownership should be dialoguing with the leadership team on why they invested in this property, what their strategic needs are, giving the management team an idea why they’re involved and what their goals are,” Hayward said. “It’s all about the long-term strategy and the hold strategy of the owner.”
Two ways panelists identified to improve that communication:
1. Align the KPIs
“When working with owners, it’s important to figure out what performance metrics are most important to them and align your goals,” Nixon said. “RevPAR Index is so important.”
2. Be Honest from the Get-Go
“We’re engaging these revenue teams to say, ‘If we invest in this, what is the right place in the market and what is the best business mix?’” Perkins said. “We say, ‘We want to get here,’ but if we can’t get here just tell us that.”
In the end, ownership groups admitted that the onus often falls on the hotel revenue team to ensure goals are aligned with ownership.
“Understand what owners want and align with expectations,” Hayward said. “Part of the role of good revenue manager is educating that owner.”