When I started in revenue management, it meant learning the hard way. No one, from my seniors to the higher management, really knew what revenue management is all about and what to expect from me and my team really.
At that time, our learnings were all on-the-job. B-side is that it was easier then, since expectations were less due to lack of knowledge on revenue management and global distribution channels. Management today knows what to expect from a revenue manager and as a new revenue manager, if you do not perform, you may have to compromise. Learning only through experience doesn’t reap good results anymore. Expectation are higher, faster results are expected and the management wants to get into it really close and deep. After all, it is a matter of their online reputation and market position.
Before taking up a role as revenue manager, I feel it is important to know at least the below mentioned 5 things to be able to do justice to the position.
1. Revenue management approach:
Gone are the days when revenue management was all about collecting and compiling data into Excel spreadsheets, analysing the data to identify trends and making a decision about hotel rates. It is now an incredibly complex process that involves OTAs, mobile marketing, hyper-interactive consumers, and direct competitors who consistently undercut their prices. Revenue management is all about having the right attitude to sell the rooms in a way that they reap maximum revenue. Approach of young managers towards revenue management should be like that of an opportunist. Extracting maximum out of a room when the room is in demand.
2. Ability to decide on effective room pricing:
Getting the pricing strategy right is vital for revenue managers. If the pricing isn’t right it is very difficult for hotel companies to grow fast because pricing is directly related to profits. If pricing is right, profits will boost faster than increasing volumes and similarly, if the pricing is wrong profits will shrink as quickly.
3. Online channel management:
In times when business is shifting towards the online channels, it is critical for young revenue managers to be able to manage each and every channel effectively. From managing relationships to technical know-how of channel extranet and channel manager tools, revenue managers are supposed to be champions of online business. Whether it is OTAs, brand website or GDS, getting the maximum out of these channels is key responsibility of a revenue manager.
4. Global Distribution Systems:
While GDS is the most traditional electronic channel of distribution, very few hotel managers know all about it. It is a very important channel, especially when hotel is in location where maximum international corporate business is expected. Knowledge of RFPs, TMCs and ODDs is pivotal.
5. Digital marketing basics:
It is important for revenue managers to be able to walk in the footsteps of digital marketer. The most important reason for such integration is data. Data is the backbone of revenue management and digital marketers have a lot of data and insight on consumer behaviour which is important for revenue managers to be able to plan better. Also, while revenue managers are also responsible for electronic business at the hotel, knowledge of digital marketing helps in planning digital sales better.
It has been observed that while a lot of reservation experts are getting converted into revenue managers, some of the managers in that bunch do not have even the basic skills of handling revenue management function. For start, young revenue managers should have confidence in at least these 5 basic skills that can further be enhanced with training and experience.