F E AT U R E A R T I C L E
Are you practicing
Revenue Management
or Revenue Strategy?
By Philip Niemann Director of Customer Success, Asia Pacific, Duetto
I
s your hotel revenue team still one person relegated
to a dark office in the corner? Do you go to him or
her for the forecast and leave the rest to the sales
and marketing teams?
If so, you’re not alone. Despite revenue
management’s evolution over the past two decades,
some hoteliers still don’t understand its importance.
In reality your revenue team should be driving your
strategy. Demand and forecast numbers should not
only inform your marketing teams, they should shape
promotions to fill your hotel’s need periods with the
right guests at the right price.
In fact, at some of the most innovative hotel
companies, the revenue team is a central part of
operations that drives many decisions and actions in
adjoining departments. If the Revenue Strategy you
pursue doesn’t also address collaborating with all
departments, using an open platform where all your
source systems unify and share data, you might only
have old-school revenue management.
It Starts with a Culture Shift
Hotel Revenue Strategy requires a fundamental shift
in a property’s organization and culture. Without a
focus on cross-departmental collaboration and sharing
of data, there’s no way for a hotel or casino to align
everybody’s goals around increasing profitability.
DORMs need to participate and be involved in the
process. It’s no longer enough for DORMs to pull and
read hotel performance and market data. He or she
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also must know what to do with the data and how to
turn it into profitability.
Ultimately, the revenue team is responsible for
delivering the top-line results of a hotel’s room
revenue, and more hoteliers on the periphery
are becoming keenly aware of the heightened
responsibility.
Which Departments Should be Involved?
When the revenue team is at the hub of operations, it’s
important the team keeps the rest of the hotel in tune
with both performance data and goals.
Of particular importance is the revenue team’s
relationship with the hotel’s general manager and
director of finance. The general manager will want
to track key operating metrics, such as RevPAR and
RevPAR Index, specifically interested in performance
versus the previous year.
For the finance department, however, revenue
management is more of an operational expense tool.
Finance will want to know data and numbers that flow
to the bottom line: expenses, staffing, payroll, etc. They
want to know whether it’s going to be a good year or a
bad year so they can prepare for more or less staff. If
the revenue team misses budget or forecast, payroll is
affected.
The revenue team should be actively involved with
sales and marketing departments and initiatives, if
only to ensure the hotel is stimulating demand during
need periods. A revenue manager is often the one to