Question for Our Revenue Management Expert Panel:

For best collaboration, should Revenue Management fall under Sales & Marketing – or vice versa? Should they be separate departments on the same level of the hotel hierarchy? Or one single department?

Industry Expert Panel

Our Industry Expert Panel exists out of professionals within the hospitality & travel Industry. They have comprehensive and detailed knowledge, experience in practice or management and are forward-thinking. They are answering questions about the state of the industry. They share their insights on topics like revenue management, marketing, operations, technology and discuss the latest trends.

Chaya Kowal
Chaya KowalDirector of Revenue Management, Potato Head Family

“I feel that the most important thing is to break the barrier between these departments; and there is already a shift in mindset taking place which is good to see! Revenue Management should act as the core element in bringing together the sales and marketing teams so that everyone is aligned on the same goals. It is also essential for everyone to understand the role of each other and how things work. Revenue Management has to remain objective and unbiased, ensuring that whatever strategy is being implemented does not negatively affect any segment.

Revenue Management could be a separate department on the same hierarchy level as Sales and Marketing, but the most important factor here is for everyone to work in collaboration. Very often, when Revenue falls under the Sales and Marketing department, we can see a conflict of interest (sometimes we see people working against each other rather than working together). Many hotels often see the conflicts between Sales and Revenue.

Revenue Managers should take time to explain the strategies to Sales and work together on optimizing this segment. While Revenue provides data-based insights to Sales, the latter contributes with real-time feedback from partners and competitors. All this used together will definitely help to optimize this segment. Sales teams gather a lot of valuable data from the relationship that they build with partners and this can be used to efficiently create and personalize offers that would produce more revenue for the hotel.

When it comes to Marketing teams, there are tons of marketing and social media analytics that are useful in Revenue Management. Again, it is important for Revenue to be fully engaged with the Marketing team. Both should understand how they are connected, inter-related and how they can combine their forces when they work together. This allows them to properly plan campaigns using the marketing data on hand and also analyze past campaigns to understand what works and what does not. No one can function properly without the other. For example, Revenue can come up with amazing packages but if it is not being marketed correctly, it might not convert.

Successful teams are those that are willing to change / adapt and analyze to move forward together. The goal is to work together, as a team and analyze data for all segments to be able to make the proper decisions in terms of pricing, offers, and strategy with the ultimate goal of increasing total revenue.”

Theresa Prins
Theresa PrinsFounder, Revenue Resolutions

“Traditionally pricing, a huge part of Revenue Management, was determined by the Sales Manager and when yield management entered the industry this was automatically placed under Sales and Marketing. As the role of yield management evolved into Revenue Management where they analyse customer behaviour and trends, Revenue Management started a hierarchy where they indicate the business needs of the establishment through demand and segmentation analysis. Revenue Management also took on a role of considering a piece of business against the business needs and therefore can have a clear voice on whether a business piece will optimise revenue for the establishment or not. The directive on what business we need by when, stimulated through sales or marketing is set by Revenue Management.

It is therefore my opinion that Sales & Marketing must report into Revenue Management. I have worked in an environment where Sales, Marketing and Revenue are 3 separate departments on the same level. This is my second option on how to set up the commercial sector of the business. In this case the 3 departments decided together on the business requirements and where consensus couldn’t be reached the General Manager had to hear both cases and had the final say. However, each department brings fundamental values to the table and are all critical to the success of the business.”

Paulo Aragao
Paulo AragaoRevenue Management Professional

“Revenue Management and Sales & Marketing should definitely be separate departments. The goals overlap in terms of revenue generation, in different ways, but the responsibilities and processes are very different. Even though I firmly believe professionals from both departments should have intersecting skills – salespeople should also be analytical, revenue people should also be communicating and negotiating, etc., the core of their job functions are different.

Whether they should be on the same level of hierarchy or not, I believe it depends on the hotel. Independent hotels have the flexibility to make that decision while chains tend to separate them in the hierarchy, with separate Directors and VPs. The path to success here is collaboration. It is connecting with cross-functional teams, during that coffee break as well as in meetings and outside of meetings!”

Nikhil Roy
Nikhil RoyRevenue & Pricing Manager, Key Hospitality B.V.

“I see a huge benefit in combining these departments into one single department. There are many aspects of Marketing that are immensely useful to a Revenue Manager. For example, what a Revenue Manager wants is an in-depth understanding of the customer demographics and psychographics, guest segmentations and offers that can generate demand. This data can be provided by the Marketing team.

In short, when both these departments work together, they can offer the right price to the right guest at the right time. Revenue Management is no longer about forecasting, setting rates and selling the room. It has developed and evolved into a larger field, where collaboration is important.”

Daniel Feitosa
Daniel FeitosaRevenue Management Specialist

“Revenue Management should be in the same hierarchy level of Sales & Marketing. This way, it can bring clear opportunities to boost Sales & Marketing work.
When we are looking for actions, offers and promotions, Revenue Management needs to show to all Departments where the need is and then Sales & Marketing teams can fit the hotel’s need. Additionally, Revenue Management should be integrated with the Marketing vision to create value for its insight.

In my experience, when Revenue Management is under Marketing, the need period may conflict with the calendar of actions that Marketing already has. The best environment is the one where all the teams are able to bring their proposals to build an action plan together. Looking at the future needs and opportunities, Revenue Management can avoid promotions during dates with high demand, even if it’s a useful date for Marketing purposes. This is the way to get the best of all teams.”

Sandra Gannon
Sandra GannonCommercial Consultant, Revenue Puzzle

“I believe Revenue and Sales & Marketing should work closely side by side and complement each other. The ideal situation is that both teams are overseen by a Commercial head who also would take responsibility and accountability for the Total Hotel Revenue Management. Revenue and Sales departments as well as Operational departments all bring a different skill set to the table, which in a team, can work incredibly well towards success.”

Daphne Beers
Daphne BeersOwner, Your-Q Hospitality Academy

“Overall I think that it can work in various ways and it is highly dependent on the hotel organization, the strategy, the people (and their expertise) in the roles and the business mix. What is important is that you always want to make sure that the strategy, goals and people are aligned in what they do. Break the silos: make sure you have a team that is working together and does not have their own private agenda that could conflict with your overall goals!
If you can create synergy between these areas, your hotel will be skyrocketing in results!

I do believe that marketing importance is growing fast and that the requirements & skills needed to optimize the efforts are no longer a one-person show. I truly think that it is beneficial for every hotel’s performance to have a sustainable concept and strategy. Therefore hotels could consider combining branding (with purpose!) & marketing and separate sales.”

Dr. Betsy Stringam-Bender
Dr. Betsy Stringam-BenderProfessor of Hotels & Resorts, New Mexico State University

“The role and function of revenue management differs from property to property, and so there is no single “best” organizational structure. Additionally, revenue management is expanding beyond just room nights to other areas of the hotel, e.g., spas, golf courses, restaurants, catering and events, etc. As the role and function of the revenue manager expands, I think we will see more hotels and hotel companies place this position higher on the organizational chart.

It is also important to note that many hotel companies, large and small, often share a revenue manager between properties. In this case the revenue manager is part of the corporate organizational structure.”