The Quiet Science of Revenue Management Takes Hotel Marketing by Storm

Written by
Courtney Granger, Director, Revenue Account Management, Preferred Hotel Group
and
Elizabeth Cambra, Corporate Director, Revenue Optimization, Outrigger Enterprises, Inc.

The role of the Revenue Manager has changed over the past several years and has evolved into a key strategic position for the property. The most successful properties have adopted a revenue culture where a team, comprised of the General Manager, Revenue Director, Director of Sales & Marketing, Controller, Front Office Manager, and other key operating departments, ensures revenue optimization and fosters a team environment where strategies are pushed to the line, while keeping financial and guest expectations in mind. Team synergy is necessary at all times, but ultimately, the Revenue Manager makes decisions based on what is best for the hotel, including groups, negotiated rates, advertising/marketing campaigns, catering, spa, and golf, etc.

Revenue Managers often report directly to the General Manager and are the driving force behind distribution strategies for the hotel. There are literally hundreds of programs available in which to participate, so it is the role of the Revenue Manager to decide what is going to work well for the hotel. Their expertise is trusted and respected.

Revenue Managers work closely with the Sales team to discuss group and corporate rates and to decide as a team what is in the best interest of the hotel, making sure higher-rated business and return guests are not displaced.

“As a Revenue Manager, I work very closely with the Sales team. I help qualify business, along with determining the right rates to offer. We work on setting the right stay patterns and the right rates, along with the right mix of social and group business. It is definitely a team effort.” Jim Kasper, Revenue Manager, Stein Eriksen Lodge.

The Revenue Manager is skilled at knowing what will drive revenue during need periods. This is where ancillary revenue comes into play. Working as a team, the Revenue Manager and key management from F&B, Spa, and Golf develop programs that will bring additional revenue to the hotel, and be simple for Reservations staff to sell and for Front Office staff to execute.

After many years of “feeling” our way through this discipline, HSMAI’s Revenue Management Advisory Board/Special Interest Group has sponsored Kathleen Cullen and Caryl Helsel, The Solutionz Group and inspire resources, to write Defining Revenue Management: Topline to Bottomline. This highly anticipated document was released at the HSMAI Revenue Management Strategy Conference June 19, 2006, held in conjunction with HiTec.

Helsel commented, “We believe that this special report will be an invaluable resource to the hospitality world. Everyone in the industry who reads this report should be on an even playing field with regard to comprehending the fundamentals of this often misunderstood practice. Our hope is that more and more hoteliers will embrace solid revenue management principles and will be even more successful in driving profit than ever before.”

Cullen added, “This special report will provide the education that is necessary for all levels of management and owners to gain a better understanding of this practice. It is vital to a company and hotel’s success, that there is support and buy-in from senior management and owners in order to properly implement and execute revenue management appropriately.”

These topics and more will be expounded upon during HSMAI’s upcoming 5 part webinar series Defining Revenue Management: Topline to Bottomline beginning in July. Report co-author, Kathleen Cullen, will be HSMAI’s special program speaker for a series of hour-long webinars hosted July 11, July 25, August 8, August 29, and September 12th. Register online at www.hsmaiuniversity.org and learn how to more effectively manage practices and strategies in revenue management today.

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Sunny Times, But Clouds On Horizon | By Steve Rushmore
Looking around the world, with only a few exceptions, it appears the hotel industry is doing very well. Global travel is up, particulary from some of the emerging markets as India and China. The General feeling at most of the hotel investment conferences is one of restrained euphoria. While this recent upswing in revenue and profitability may warm the hearts of owners, operators and investors, I am a little concerned about some long-term trends that might be adverse to the future of the industry. Let me describe a few.

Adobe PDF Document (Download Acrobat Reader) | File Size: 1551 Kb

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COLUMNS

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FEATURED EVENTS

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HSMAI’s Affordable Meetings® West 2006 14 - 15 June 2006
Long Beach, CA

HSMAI's Affordable Meetings® is a unique, FREE trade show and conference for cost-conscious meeting planners, which takes place annually in three locations across the country.

HSMAI Revenue Management Strategy Conference 19 June 2006
Minneapolis, MN

HSMAI's third Revenue Management Strategy Conference will be held in Minneapolis in conjunction with the HITEC 2006 conference. This year’s program, presented by HSMAI's Revenue Management Advisory Board, will be centered on The Politics of Revenue Management. Presenters will challenge participants to exert stronger leadership within their respective hotel/companies and offer forward-thinking issues, ideas and strategies.

Revenue Management Special Interest Group (SIG) Strategy Conference ASIA 27 June 2006
Hong Kong, Hong Kong

Full-day sessions with keynote speaker, followed by a roundtable session to address key issues and share insights, strategies and solutions. Participants will be senior level hospitality sales and marketing professionals with direct responsibilities for revenue management at the corporate or property level, as well as key management staff with an interest in staying abreast of the changes and trends within this discipline.


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