“ owners are placing increased emphasis on understanding the drivers of acquisition cost growth and are calling for increased scruTiny .”
Technology : Revenue ManageMent
“ owners are placing increased emphasis on understanding the drivers of acquisition cost growth and are calling for increased scruTiny .”
system . However , there are significant challenges standing in the way .
The various funds used by a hotel to acquire customers are spread between many departments and accounts , and some are not recorded on a property ’ s P & L statement , although revenue managers could start recording their sales and marketing expenses and integrating those into their tabulations .
40 %
35 %
30 %
25 %
20 %
15 %
10 %
5 %
0 %
– Brian Berry , Host Hotels & resorts
2009 2010 2011 2012
“ Our budget templates and P & L reporting will have to change ,” says Bonnie Buckhiester , principal , Buckhiester Management , a Seattlebased revenue and yield management consulting firm . “ Our metrics need to get a lot more granular .”
“ It is sort of a joke that our most important report card still treats a room we sell directly to a customer and one sold through an intermediary with a 20 % margin , each at the same price , as having the same value ,” says Scott Dahl , vice president of technology , Hersha Hospitality Management , Philadelphia .
This means that while the profession is in what revenue managers call the “ awareness stage ” where they have identified the shortcomings , the tools to address those are not yet available . Given the demand for these tools , it could only be a matter of time before the sea change on metrics and benchmarking gathers steam .
New pricing strategies In the United States , robust performance
hoTel guesT acquisiTion and reTenTion expenses are rising aT Twice The raTe of revenue growTh
commissions
Total revenue room revenue Total revenue Total s & m commissions Total acq costs
Hospitality Asset Managers Association , Kalibri Labs
The revenue manager ’ s new role
In addition to how the metrics of the revenue manager may change , HSMAI Revenue Optimization Conference attendees widely discussed how the job ’ s responsibilities , title and even place in a hotel ’ s management structure may change .
The job will become more strategic as the role expands from measuring room revenue to measuring other revenues to analyzing how to achieve maximum profitability . As this happens the hotel industry could see the job ’ s title change to revenue strategist or director of profit management . Also , instead of worrying about how to communicate the hotel ’ s revenue optimization goals to the sales and marketing team — a perennial topic of discussion at conferences — revenue managers may find themselves in charge of the sales and marketing team to ensure the most profitable business mix is being sought . Regardless of whether that happens , though , revenue managers need to expand their skill set to manage their new responsibilities .
“ We went from yield management to revenue management . Now we need to go to revenue optimization and eventually profit optimization , but we ’ re not quite there yet ,” says Sloan Dean , vice president of revenue optimization at Ashford Hospitality Trust , Dallas . “ At this conference there is this undercurrent of ‘ just wait until all the other departments report to revenue management .’ However , there are too many revenue managers that have only been in revenue management and not sales and marketing , development or finance .”
56 HOTELS September 2014 www . hotelsmag . com