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Who moved my cheese?! Acceptance Of Revenue Management at General Manager level

Posted on 17th Jun, 2016 by Geetika Bahri Jain
Who moved my cheese?! Acceptance Of Revenue Management at General Manager level

“Who moved my Cheese” is an amazing book written by Dr Spencer Johnson. This book is about how we should deal with change in our life and work.

As we know, Change is the only thing which is constant and it will going to happen in your life whether you like it or not. It’s better to be ready for that rather than getting an unexpected surprise in life /work.

One of my favourite lessons out of this book is “Smell the cheese often, so you know when it is getting old”, meaning : Monitor change in your cheese and prepare yourself accordingly, so when change in your cheese will happen, you will be ready for it.

During a GM meet at one of my previous organisations, I got a chance to sit with a group of general managers, who were accompanied by their sales and revenue heads, and discuss what they thought about revenue management. The group had around six to seven general managers and we had about as many opinions on the subject.

These hotel general managers were a combination of those with as less as 3 years general management experience to aged general managers with around 25 years of experience in the hotel industry.

It was interesting to hear so many different views on what revenue management is to what a revenue manager can do. While some general managers were really comfortable with revenue management, some really didn't understand its relevance. It was a very good discussion as we could gather not just the thoughts of general managers but also the head of sales and revenue and what they felt about the general managers involvement in revenue management.

One of the key concern the we could figure out was relationship between the sales department of the hotel and the Revenue Manager. It was a potential area of confusion. Some felt the communication was very little between the two departments and some raised an issue around corporate pricing being sabotaged by a lower rate that the Revenue Manager had offered to the Electronic Distribution Channels.

One of the sales head indicated that his team had to take approval from revenue manager prior to quoting rates to groups and experienced difficulty in being able to convince the revenue manager.

After all the discussions, one thing was clear that general manager had to have a active leading role in the the revenue management processes. However, the interest level of these general managers was more or less low. This could possibly be because of lack of knowledge and practice of revenue management and electronic distribution.

How does a hotel general manager lead the Revenue Management process to secure the client needs and hotel's revenue objectives while ensuring the cohesiveness of the team?

Here a few tips for hotel general managers who are willing to change the go the revenue management way:-

Understanding what revenue management process is: You cannot manage the process unless you fully understand it so to get comfortable with the revenue management process, it is important to fully understand it. The discipline of revenue management has morphed over time with many new systems, tools and techniques available. Take a course on up to date revenue management.

Accept the electronic channels of distribution: Get an idea on what these new channels of distribution and make use of these channels to grow the market value and revenues of the hotel. By understanding how to do this, you can make these electronic channels a valuable part of your revenue management strategy.

Set-up a Revenue Management Strategy: A revenue strategy consisting of roman rate allocations by the market segment, opportunity dates and seasonalities for the year should be established and reviewed quarterly. This should be an essential part of the marketing plan developed in collaboration with the Revenue Manager, the sales department, front office and reservation managers and anyone else whose department is affected.

Manage conflicts: Conflicts are ought to happen. As a leader of the property it is important for a general manager to understand how to resolve revenue management conflicts. Best is to create a framework for managing revenue management conflicts when they arise and establish a decision making process.

Do not fear taking risks: It is important to take risks yourself and also encourage your staff to take risks if they can provide valid reasons to take them. You may win sometimes and sometimes you may lose.

For success of revenue management practices at a hotel, general manager’s role and intervention is critical. It may sound like going through something all over from the start, but once you are on top of it, it is only going to help you meet your revenue goals.