SPECIAL REPORT : THE REVENUE MANAGER
COMPENSATION
CLIMBING
Given the increasing importance of the revenue manager position vis-à-vis the rest of the hotel management staff and the fact that hotel management companies are reportedly having trouble finding qualified personnel for revenue management positions despite high unemployment levels in much of the world , revenue manager positions are offering steadily increasing salaries .
“ I ’ ve seen an increase in pay because there is a hiring frenzy ,” says Juliette Boone , partner , North America , HVS Executive Search . “ There is competition in respect to compensation .”
The salary amount , of course , varies by company and location , but typical starting annual salaries for a singleproperty revenue manager can range from US $ 50,000 to US $ 70,000 , and for a portfolio revenue manager US $ 70,000 to US $ 110,000 .
The position is almost always tied to a similar bonus system as the rest of a hotel property ’ s senior management . The bonus , usually 25 % to 30 % of the total salary , is based on profitability gains and RevPAR measured against the hotel or portfolio ’ s competitive set . “ There ’ s a base salary and there ’ s a bonus incentive based on RevPAR . The bonus program is probably 25 % of their base ,” says Richard Moreau , COO of Strategic Hotels & Resorts , Chicago . “ The bonus criteria is RevPAR penetration index .” agreeing with you , and you have to be a great listener . The salespeople are emotional , and they get attached to their customers . We have to have more empathy toward people because great revenue managers work in black and white , while hotel managers and sales staff work in grey .”
Of course the primary goal of any revenue manager ’ s strategy is to increase RevPAR as much as possible by achieving the optimal ratio of occupancy and rate . “ The revenue manager analyzes the potential displacement of demand with a higher yield due to discounting proposals , but also takes into consideration potential long-term benefits if this proposal is accepted ,” Wolf says . “ It is very important that the communication between sales , marketing and revenue management works well and that the various disciplines do understand and value the various objectives . At the end of the day everybody wants the property to be successful and profitable .”
Channel management strategies A revenue manager ’ s skills will be put to the test in sorting out the best channel management strategy for his or her hotel . Despite grousing heard at panel discussions at hotel industry conventions about the costs of using online travel agencies and flash sales , hotel companies assert that the best mix of channel distribution for a hotel can include these sources , depending on the property ’ s segment and location .
“ The best strategy varies by hotel ,” says Michelle Woodley , senior vice president , distribution and revenue management , at Preferred Hotel Group , Chicago . “ With online travel agencies , it depends on the hotel . We take a very regional approach : Is this the only way this customer can reach you ? As you can imagine , a big
‘‘
managers right now , but
THERE IS NOT ENOUGH
TALENT IN THE MARKETPLACE .”
– Juliette Boone , partner , North America ,
There are many people trying to hire revenue
HVS Executive Search
city-center hotel will move a lot of business by the OTAs versus a more remote resort destination , perhaps . But it might bring incremental business to them that they might get .”
In addition to online travel agencies , the influence of social media websites on a hotel ’ s reputation can significantly affect a hotel ’ s revenue management strategy for better or worse . After hotel review website TripAdvisor put Cedarbrook Lodge , located in Seattle and managed by Coastal , at the top of its popularity index for U . S . hotels in 2011 , the property saw an influx of guests .
“ That was huge . We did a case study on that with the publicity and attributed 500 room nights in the first quarter just to that ,” Cornett says . “ We had to budget against that this year .”
28 HOTELS March 2012 www . hotelsmag . com