How Can Revenue Management Collaborate with Sales & Marketing Teams?

“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.”

“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.”

“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!”

“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.”

“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.”

“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.”

“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.”

“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.”

“Forums seem to point in that direction, that is right. With technology now taking care of certain tasks that were once very time-consuming, revenue managers can focus purely on strategy, together with the Sales Manager, roles that will converge eventually. In fact, some people talk about the possibility that the role will become a “Profit Manager”, i.e., not only focused on driving revenue to the property but also – or mainly – focused on profitability, with a closer relationship with finance.”

“The relationship between the revenue manager and marketing, as well as sales is much stronger than with any other department. Aligning revenue, marketing and sales efforts can bring greater results for hotels. Ultimately, they are sharing a common goal of growing the revenue and therefore a collaboration between these departments is a key to a successful commercial performance.

Like with most other organisations, teamwork is highly important therefore regardless of which department RM falls under, all departments and stakeholders must seamlessly work together. One of the keys to success is implementing a revenue culture across all areas, therefore Revenue Managers should build a strong relationship with operational departments, mainly the Front of House. Customer-facing departments can support sales efforts by driving upselling and cross-selling, capturing no-show and cancellation revenue accurately.”

“The industry has understood that the old model, where Revenue Management falls under Sales & Marketing, kills the potential to evaluate business from several angles. Sales & Marketing is responsible to generate demand and Revenue Management is responsible to define the best business for a certain period or day and needs to base its decisions on forecast assumptions.

These two very different responsibilities sometimes stand in conflict with each other and therefore require a healthy debate at eye level.”

“I firmly believe that they should be two departments on the same level of the hotel hierarchy. I think it is very important that those who are in charge have a strong understanding of the needs of each department and with that understanding, have a healthy ‘battle’ in getting the hotel where it should and could be. I don’t think that if you are an expert in sales you have the same skill set you need to be an excellent Revenue Manager. I think those two positions should complement each other. More and more as a Revenue Manager you need the skills of a Sales Manager and the other way around, but in essence, they are still different skill sets that are essential to perform these jobs.

Where can we learn? I think the Revenue Manager can use the skills of the Sales Manager to improve ‘selling’ Revenue Management within the hotel and convincing everyone of the right strategy. Where the Sales Manager can be helped is by supporting client offers with data and checking if the top 10 clients in numbers are really the top 10 clients the hotel needs.

In line with that, the reservations & meeting and events team should be part of the sales team as well but should receive proper revenue management training and guidance to be able to balance out the sales conversations with clients / groups / event planners, etc. and to be on top of high conversion with the same understanding of what the impact is on the bottom line of the hotel. And of course with proper training, it can also be the other way around. They need to know what they are selling, who the ideal client is, how to sell and how to come to the best offers for the client and the results of the hotel.”

“Revenue Management and Sales & Marketing both require very different skills sets and you would not do justice to either one if you aligned Revenue Management to Sales & Marketing or vice versa. Revenue Management is very fact & numbers based, whereasnSales is all about the customer relationship and Marketing is all about creativity and understanding the target customer base.

All three departments should be aligned under the Commercial Department umbrella, which would also accommodate Digital and Customer Management.”

“Having a silo or a hierarchy between these two departments does now work anymore. Revenue, Sales, Digital and Marketing must work together and bring their own strengths to the table. They need to work as one single department with one single and shared objective: to drive profit. Only by breaking down the barriers and the single departmental interests (eliminating different goals that might be contradictory), the commercial functions can move in unison towards the same direction and bring the best revenue and profit for the hotel.”

“There should be a Commerical Department within the organisation with the ability to draw on the expertise of those within the revenue, sales, marketing, distribution fields. It is definitely time to break the silos if they still exist within some companies. Everyone needs to band together to secure the profitability of the business moving forward.”

“Ideally, I think that there should be a single Sales department incorporating the Bookings, Revenue, and Marketing departments. After all, these departments have the common goal of increasing sales and profits and must work in synergy towards achieving this goal, albeit each with its own peculiarities. Basically, these departments should work together with the joint objective of communicating (marketing) and selling (reservations/revenue) the right product at the right time to the right customer at the right price. Revenue and marketing are two sides of the same coin, and I cannot imagine one without the other, because sometimes the boundaries between the two become increasingly blurred to the point of disappearing.

There may be situations where only revenue management without marketing applies and vice versa, but the results will never be quite the same as when the two go hand in hand, and in this latter case, the results are truly extraordinary. One only has to look at the excellent results achieved by properties that adopted both revenue and marketing practices during the pandemic, thus managing to remain profitable.

In a situation of decreasing demand, it was essential not only to identify the right price, cancellation policy, segments, and distribution channels (revenue management) but also to adopt the appropriate communication in the form of photos, texts, descriptions, videos, e-mails on the chosen channels (marketing) in order to attract those specific segments during the pandemic. Without this mutual complementarity, those same results would have been quite difficult to achieve.”

“They should be separate departments. For as long as I can remember, sales and revenue often pull in different directions. It is healthy to have differing views and opinions and it is through healthy debate, centred around a clear vision and strategy, that allows all the departments of a property to pull together towards a common goal.”

“In my 30+ years of experience in the hotel industry, I have always worked in an environment where Sales & Marketing and Revenue Management are different departments but on the same level of the hotel hierarchy. This type of organizational structure has worked well for full-service hotels. However, for smaller and select-service hotels, they can be combined in one single department. For example, sales managers often do not have access to the big-picture of top-line revenue, target ADR and suggested rates for a given period of time. So why not have a Director of Market Strategy lead both departments with a team of sales managers and revenue managers?”

Ask a Question & Join Our Expert Panel

Would you like a question to be answered by our Industry Expert Panel? Or would you like to join our community of experts and share your experience, insights, and knowledge with fellow industry professionals? Via the buttons below you can submit a question or submit a request to become part of our expert panel.