Revenue managers should embrace ‘job creep’
27 JUNE 2014 8:22 AM
Revenue managers need to embrace change and gain experience in areas such as marketing to assist them in their jobs, said panelists at HSMAI’s ROC conference.
LOS ANGELES —The role of the revenue manager has changed.
Ten years ago, the revenue manager was responsible for changing rates, yielding inventory and signing off on the reservation department payroll. Today’s revenue manager plays a much different role, one responsible for, among other things, synchronizing commerce, distribution, pricing and sales and marketing efforts, panelists discussed during the Hospitality Sales and Marketing Association International’s Revenue Optimization Conference at the Westin Bonaventure in Los Angeles.
“It’s amazing to see in the last six to seven years how the practice has evolved,” said Sloan Dean, VP of revenue optimization at Ashford Hospitality Trust and member of HSMAI’s Revenue Management Advisory Board. “The thing I would encourage everyone in the room to do is embrace job creep.”
Dean said during a panel titled “Today’s top line leaders: When the market demands a role change” that more revenue managers need to embrace job creep—that is, obtain experience in different areas that help aid the revenue management process. For example, revenue managers need to embrace opportunities to better understand marketing that has pricing associated with it.
“I think we need to have a breakthrough in a couple executive positions. We haven’t had a CEO that has a strong revenue management background,” Dean said. “The ownership side is starting to embrace it. A lot of revenue management professionals will have an opportunity to work for an ownership group. That’s going to become the norm.”
Carolyn Fredey, market director of revenue management for Marriott International’s New York City properties, said owners often look to revenue managers to give them a lay of the land.
“I’ve been to a lot of owner meetings. It’s so funny. The meeting goes on for about four hours, and revenue management is the only person who has spoken,” Fredey said. “They want to hear about top-line performance, distribution trends, and they’re looking for us to provide that information.”
Today’s revenue managers are often tasked with providing information on distribution trends, metasearch and measuring big data, which is something the industry as a whole has struggled to keep up with, panelists said. This calls for a change in the revenue manager’s role.
“I’m amazed at the number of people I interview that can’t tell me about the new, latest and greatest products. How do you segment your guests? We’re getting to the point where we’re really profit managers,” said Susan Weigel, VP of revenue management and distribution at Denihan Hospitality Group. “There’s a whole other level of complexity that we’re just now getting into.”
The next step?
The biggest problem facing revenue management is that the majority of companies are managing revenue based on a system that was created in the ‘80s and ‘90s, said Patrick Bosworth, CEO and co-founder of Duetto and member of HSMAI’s Revenue Management Advisory Board.
“(The systems) were created when distribution was very simple. Revenue management practices have not kept up,” Bosworth said. “We’re still living in a hurdle rate world, and that has allowed third-party intermediaries to create arbitrage opportunities …
“I think that companies that don’t have the ability to manage those discounts, and third-party channels are leaving a tremendous amount of money on the table.”
Bosworth suggested that the revenue manager position needs to evolve into a marketing position, and the data that revenue managers look at needs to include customer insight data, not just reservation data.
In order for revenue managers to move forward, technology challenges need to be addressed, too, Dean said.
“We have a lot of things that prevent us right now. You can’t rent a room by the hour; you can’t check in all the way to your room,” he said, adding that soon both will be possible.
Thinking with a sales mind
Panelists poked fun at how sales staff and revenue managers don’t always get along, but there has to be a “marriage” of sorts.
“If you still have a sales team making group booking decisions on their own that’s a real problem,” Dean said. “I don’t think we need revenue managers drafting collateral and rolling out the clever points of a leisure/transient strategy. But it’s a marriage.”
Bosworth said he thinks marketing should report to revenue management.
“We really want great leadership. It doesn’t matter what the titles are,” Dean said.