Revenue managers are tomorrow’s leaders
20 NOVEMBER 2013 9:46 AM
Strong skills in leadership, motivation and communications can propel today’s hotel revenue management professionals into top leadership positions in the industry.
REPORT FROM THE U.S.—Today’s hotel revenue managers are likely to be tomorrow’s corporate leaders. But before that happens, revenue managers need to improve their leadership, motivational and communications skills, as well as their analytical talents, panelists said Tuesday during a webinar titled “Revenue management: the road to CEO,” hosted by the Hospitality Sales and Marketing Association International’s HSMAI University, Hotel News Now and its parent company, STR.
Revenue management should be part of a hotel organization’s marketing team, not a separate function, the panelists said. The two disciplines need to merge their goals, tactics and compensation schemes to achieve a total revenue goal.
“We must look at our processes and our technology, but most importantly we must take a look at our people,” said Karen McWilliams, senior corporate director of revenue strategy for Concord Hospitality Enterprises. “We must define a process in which we’re all working toward the same plan. One strategy, one plan, but with each of us having very different purposes.”
She said changing attitudes in an organization starts with celebrating small successes and rewarding behaviors that result in success for the team.
“It’s about a continued team approach with the revenue leader pointing the way, and with the revenue leader asking for that risk but proving that success can be there,” she said. “A key trait of an effective revenue leader is that they must be good with analytics but they also must be great influencers. We must show the value and influence decisions. That’s carried out into the market because our sales leaders influence decisions every day.”
Top line focus
Greater pressure for accountability from stakeholders’ demands has resulted in an emphasis on sustainable revenue growth, the panelists said.
“The company of tomorrow will be ones with a focus on top-line growth,” said Calvin Anderson, director of revenue management for the Lexington Autograph in New York at Highgate Hotels. “This new direction demands new leadership, which I believe is revenue leadership.”
Anderson presented five traits revenue leaders of today and tomorrow must possess to be successful in a changing hotel environment.
- They need to be visionary.
- They need to be translators who can speak the revenue strategy to all types of people in the organization, from the operations team to the sales and marketing team.
- They need to be practical, delivering step-by-step plans that all partners will understand and embrace.
- They need to be implementers and push change, rather than simply talking about change.
- They need to have the ability to produce enthusiasm throughout the organization.
Driving market share and improved revenues requires hotel teams to approach revenue management from a new direction, McWilliams said.
“We often get caught up in the (philosophy that the) customer is always right, and while that may be true in operations, no such rule exists in strategic execution,” she said. “We’ve fallen into a pattern of selling what the customer wants to buy rather than what the hotel needs to sell.”
She said hotel organizations need to review the fundamental structure of the team that will deliver on a hotel’s revenue and sales strategies.
“20/20 is the minimum standard for all directors of revenue. A keen eye married with the experience in interpreting the data is the voice that must recommend the very best tactical and strategic direction,” she said. “This is where the revenue plan is created and the playbook by which all sales leaders play.”
Patrick Bosworth, co-founder and CEO of Duetto*, said he believes revenue management is and always has been marketing.
“The idea there is convergence between these disparate disciplines makes no sense to me,” he said. “The revenue management discipline should have always been a marketing function.”
He said when revenue management was introduced to the hotel industry it was a mistake to select managers from reservations or front desk departments simply because they knew the systems and technologies.
“It was the wrong approach then, although that’s not to say that anyone who comes from those backgrounds shouldn’t be in their positions,” he said. “But the idea that the most important thing should be a basic knowledge of the systems and the reservations booking process is not the right approach. You need revenue management people who are able to think as marketers.”
He said it’s important for revenue management to bridge the gap to better understand marketing philosophies and strategies. It’s a matter of building relationships.
“It’s important to be humble and curious to understand these strategies. Brainstorming that comes from that dialog can lead to tremendous upside because you end up realizing there are some very quick and easy processes or strategy changes that could be a big success and that starts to build trust between the organizations,” he said.
Not everyone who is a revenue manager today has the skills to evolve into leadership roles, Anderson said.
“Some revenue managers need to be fired and never brought back into the field. There are some who are good at analytics, and there are some who have all the pieces (to be a leader),” he said. “The reason we consistently see company leaders pulled out of the sales and operations teams is because of their people skills. You need to learn leadership and how to motivate a whole team as well as be a brilliant numbers cruncher.”
He recommended a variety of tools to acquire these skills, including self-help books and personal development training courses.
Correction, 25 November 2013: An earlier version of this story misidentified the name of the company.