There is a recognized need for proactive revenue strategy and technology investment for many hotels. However, once the new technologies are integrated, there remains an open question: who’s going to keep this operation running smoothly and profitably as opening day approaches and beyond?
Factors to Help You Identify the Best Staff
Below you find some factors that will help you identify the best personnel and staffing approach to get your revenue operation started on the right foot.
- Finding the right person or people starts by asking the right questions.
- What revenue management system (RMS) is your applicants trained or certified to use?
- How much experience do they have using this system in a business environment?
- Does their operations experience come from working with a single hotel or a cluster of properties?
3 Approaches to Revenue Management Your New Hotel can Implement
Today there are three common approaches to revenue management your new hotel can implement. An on-property revenue manager is a traditional approach of having a dedicated revenue management professional (or team) working onsite to drive revenue decisions and support the overall commercial function.
A cluster revenue manager works remotely (often from a corporate office) and is responsible for a group of properties, determined by location or brand, and is expected to make strategic revenue decisions for up to a dozen, or more hotels every day.
Finally, there is the option for outsourced revenue management services, which sees a hotel hand over the management of its room pricing decisions to a specialized partner or consultant group.
1. On-Property Best Practices
Typical on-property revenue management roles focus on forecasting demand, adjusting pricing by channel or rate categories, managing room inventory in direct and third-party channels, evaluating group bookings, and participating in annual budget processes monthly reviews. On-property revenue management provides the widest range of commercial support to an individual hotel compared with other approaches.
A property revenue manager can offer detailed support for commercial planning activities, owners’ review meetings, and on-property training. An on-property manager will also work closely with an RMS or other technologies helping disseminate information and data. However, experienced revenue management professionals are scarce resources. Even if you have one, you may not keep them forever as they outgrow working for one property alone.
2. Cluster Considerations
Cluster revenue management offers hoteliers the ability to access qualified revenue management talent within a reasonable budget. In addition, cluster revenue management professionals provide best practices that can be shared amongst a hotel portfolio and have direct corporate team support, such as access to regional marketing and loyalty departments.
The challenge with cluster revenue managers is that they are shared between properties and have real limitations on the time and task allocations they can provide to any single property. You may not be able to engage a cluster revenue manager at any given time directly, even if it’s critical to your hotel.
Hotel groups looking to establish cluster revenue management across their portfolio of new properties must also consider allocating the costs for this department. Will it be a subscription-based service fee? Or will the costs for accessing the cluster revenue management department be split (in some way) among the participating properties?
3. Outsourcing Options
When evaluating if the outsourcing of revenue management operations is appropriate for your new hotel, start by considering if your incoming in-house team will possess the experience and ability to operate key systems, such as a revenue management system (RMS), property management system (PMS), central reservation system (CRS), and channel manager software. Additionally, ask if your team will have sufficient knowledge of the local market, including competitor activities and experience in setting accurate rates?
If the answer is “no” to any of these questions, outsourcing revenue management activities to a group with specialist knowledge and experience may be wise. Any outsourced group responsible for your revenue management operations will require access to accurate data and must use automated technologies to support accurate and efficient pricing decisions.
In the age of big data and machine learning, an outsourced revenue management provider must operate with an RMS. Hoteliers should question any outsourced partners about what technology they use and if those systems fit their purposes.
An automated RMS will be Critical to Generate the Right Data insights.
There are many options for a revenue management team for your hotel. Regardless of your staffing approach, size of your hotel, or days left until opening, an automated RMS will be key to helping your new hotel or resort’s commercial team generate the right data insights. From adapting quickly to competitive intelligence to driving operational efficiencies to manage available inventory, a sophisticated RMS will prove its absolute worth right from the start.
As hospitality organizations restructure around forward-looking commercial strategies, those who know their way around an RMS will hold the power that comes with sharing accurate intelligence and making confident decisions. And a sophisticated RMS isn’t just for enterprise chains, but rather hospitality businesses of all types and sizes, from boutiques to all-inclusives to casinos to campgrounds.
Free Handbook: Maximize Revenue Before Hotel & Resort Opening
Whether you’re an asset manager or developer just getting started or an owner looking at paint swatches, this book is intended to help you comprehend the entire extent and seriousness of the revenue management decisions and investments you make – long before you meet your first visitor.
Within this handbook, you’ll find tips to maximize your hotel or resort’s revenue and commercial performances before opening. Click here to download the handbook “Maximize Revenue Opportunities of Your Hotel or Resort Before Opening”.