Mr. van Meerendonk

Revenue Management

A Day in the Life of Two Revenue Managers

By Paul van Meerendonk, Director of Advisory Services, IDeaS Revenue Solutions

Recent discussions have been swirling around the revenue management industry and its swift evolution over the past few years, moving steadily past merely filling as many rooms as possible to holistically approaching the quest for achieving total revenue performance. However, approaches and technologies have not been the only revenue management components swept up in these influential winds of change. The lives of hotel revenue managers have also experienced drastic changes in not only their job responsibilities, but in their overall work efficiencies, insights and performance.

The average hotel revenue manager touches a diverse range of systems within their role: reputation management, channel management, rate shopping, revenue management, property management and central reservations systems. And as advancements in these system technologies have improved how hotels are driving better revenue, they have also freed revenue managers from the tactical handcuffs once restraining their productivity.

To expound on the impacts that technology has brought to the lives of modern day revenue managers, let's examine a typical day in their life - a life with an automated revenue management system and a life still relying on manual spreadsheets and home grown processes.

A Day without Automation

A typical morning routine for most revenue managers begins by reviewing their hotel's performance from the previous day. Without an automated revenue management system (RMS), a report is likely pulled from the hotel's property management system (PMS). This report accounts for the property's out of order rooms, no-shows and actuals from the day before. It includes the necessary data points to allow the revenue manager to begin investigating any changes in hotel bookings since the day before.

Once the hotel's daily performance has been thoroughly reviewed, it is generally a suitable time to meet with the hotel sales team to discuss any group opportunities they have in the pipeline. To assist the revenue manager, s/he generally maintains a "business-on-books" folder (sometimes referred to as "BOB.") BOB is referenced during all internal revenue meetings, in this case helping the revenue manager and the group sales team decide if their prospective group business is worth taking - and at which rates they should accept each group.

The revenue manager generally spends some down time throughout the day reviewing BOB, looking at changes in the bookings week over week. S/he spends critical time manually updating spreadsheets with PMS reports, reviewing the forecast a minimum of 90 days in the future for any immediate changes to hotel pricing. After this daily review, it can be an optimal time to check in with the general manager, front desk and operational teams to communicate any relevant changes to forecasts and pricing. If there are any rate changes needed, the revenue manager will spend time manually adjusting these in all selling systems, often as detailed as adjusting rates by room type for each day.

In an ideal world, the revenue manager breaks for lunch and gets a much needed refresher hour before resuming the afternoon's activities. In many hotel worlds, however, the revenue manager ends up spending their lunch eating at their desk, pouring intensely over BOB and preparing intently for the revenue meetings that afternoon.

The next hours find the revenue manager continuing to update excel spreadsheets with on-the-books pace for two to six months in the future, competitor rate shopping information (from a report emailed through their web shop vendor), PMS pick-up report information, upcoming special events, and actuals (both compared to budget and last year.) Once the spreadsheets are updated with the newest information, the revenue manager critically evaluates and consumes the freshest information at hand, which includes consulting with competitive set reports in an effort to try to understand their competitors' potential pricing strategies.

Afternoons are comprised of meetings with the leadership team to discuss current key performance indicators (KPIs) and strategizing for any soft or heavy demand time periods on the horizon. Since BOB isn't maintained at a segmented level, they rely only a breakdown of the total hotel, total transient and total group levels. The revenue manager also sits in on group pick-up meetings with the internal departments to review and account for any recent changes to group inventory. At the end of the day, the revenue manager tucks BOB away for the evening and heads home - hoping not to get an emergency call to lower the weekend rates. After all, wouldn't it be great if it was possible to change rates from the convenience of a mobile device?

A Day with Automation

This typical day also starts with the revenue manager reviewing their hotel's performance from the previous day. Since emails are scheduled via the RMS to deliver custom reports each morning, the revenue manager checks this information quickly after logging into the computer. Some mornings even find the revenue manager checking the emailed stats from their mobile phone even before they hit the office.

Since group sales meetings have been replaced with the group pricing capabilities in the RMS, the revenue manager spends a portion of that time reviewing the relevant group business sent out directly from the system. This is also an optimal time to review the pick-up and change report that was emailed that morning. Listing all the changes in bookings since the previous day, a quick review lets the revenue manager know if there are any recent changes to investigate. With the RMS report including detailed information for various segments, it's quick to spot any discrepancies. Seeing a future decrease of 20 rooms over a three-day time period, the revenue manager sends an email to the front desk to see if a group room block expired and whether a rooming list was coming soon.

A mid-morning break to check emails is an optimal time to see if any of the departments have questions on the forecast or hotel performance after reviewing their automated morning reports. Seeing that the general manager had a question on why an upcoming weekend rate increased, the revenue manager was able to quickly generate a report showing the rise in booking pace for the date in question. A swift review of the integrated competitor pricing also shows that nearly all of their competitors have increased their rates as well. Since this web shop data is integrated into their pricing decisions, the system was able to incorporate this immediately and adjust their price in accordance. Knowing that the general manager consumes data visually, the revenue manager exported a couple of graphs to illustrate what was happening in the market.

In an ideal world, the revenue manager breaks for lunch and gets a much needed refresher hour before resuming the afternoon's activities. In many hotel worlds, however, the revenue manager ends up spending lunch reviewing reports for a weekly meeting that afternoon. In this case, the revenue manager did take 15 minutes to sneak over the restaurant's soup and salad buffet before returning to their desk.

With the leadership team having reviewed KPIs from their weekly reports prior to the afternoon meeting, much of the hour is instead spent discussing strategies, marketing initiatives and market performance. Toward the end of the meeting, the team also decides to make an adjustment to one of their rate configurations. Getting back to their desk, the revenue manager logs into the RMS to make the adjustment. Since a configuration update hasn't been made in quite a while, the revenue manager uses the system's performance support functionality to visually walk through the different steps of the task.

The revenue manager spends the remaining hours working on the strategic initiatives discussed in the early afternoon meeting. Custom reports and graphs detailed by market segment levels help identify several marketing opportunities and insights. The revenue manager also noticed that one of their competing hotels has been raising and lowering their Friday rate every single day, so a quick configuration change tells the system to ignore that particular hotel's rate changes for the date in question.

At the end of the day, the revenue manager shuts down their laptop for the day and heads home. Since the kids are off from school the next day, the revenue manager will be working remotely from their home office. And with the RMS being a cloud-based service, the system functionality remains the same from any location with internet access. Cooking dinner at home, the revenue manager sees a frantic text from the general manager. She wants to change their unqualified public rate for Friday. The revenue manager opens up their mobile app, makes the requested change and immediately pushes out the changed rate to all selling systems - wondering how revenue management life existed without the powers of technology.

One Day, Two Very Different Lives

It is clear to see that revenue managers working without the benefit of an automated revenue management system commonly find themselves handcuffed to manual data entry processes with higher risks of human error, meetings spent focused less on strategy and more on basic logistics, and relying on limited data insights to make pricing and strategy decisions. The benefits that today's revenue management technology brings to the life of the modern day revenue manager reaches well beyond a scope limited to the hotel work day. Recent evolutions in technology have positively improved on-the-job system learning frustrations and job demands that previously made a healthy work-life balance seem downright impossible at times. And as the industry continues its discussion on evolving revenue management approaches and technologies, let's not forget to mention the monumental evolution of revenue management's biggest champion: the life of the revenue manager.

As Director of Advisory Services for IDeaS Revenue Solutions, Paul van Meerendonk leads a global team of revenue management advisors focused on hotel revenue optimization projects. Mr. van Meerendonk is responsible for global development, management and operations of the Advisory Services team. He oversees the hiring, training and management of industry-leading consultants located in London, Beijing, Singapore and Atlanta. Mr. van Meerendonk also represents IDeaS on industry thought-leadership initiatives related to trends and best practices within revenue management, including authoring a number of white papers, conducting public speaking engagements, as well as leading key client webinars with an average audience of over 200 global representatives. Mr. van Meerendonk can be contacted at +44 (0) 118-82-8100 or Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.

Receive our daily newsletter with the latest breaking news and hotel management best practices.
Hotel Business Review on Facebook
RESOURCE CENTER - SEARCH ARCHIVES
General Search:

MARCH: Human Resources: Inspiring a Journey of Success

Sandy Asch

Baby boomers, Gen Xers, and especially Millennials, who now make up more than 50 percent of the workforce, want a sense of purpose at work. It’s clear that today’s workforce is increasingly concerned with doing good. People are tired of just showing up every day to perform a job. They want lasting fulfillment at home and at work. In his book, Drive, Daniel H. Pink suggests that we are in a time where individual desire to have a positive impact in the world often ranks higher than pay scale when selecting a job. Millennials, in particular, want to feel like their work has real purpose, and they want to be home for dinner. READ MORE

Whitney Martin

As new properties explode on the scene and traveler choices abound, hotels know they have to pull out all the stops to make every guest experience a positive one. Are staff friendly are courteous? Are rooms clean? Are meals excellent? Are bills accurate? We rely on our employees to execute their jobs, not just correctly, but with enthusiasm. And, if they don’t, business suffers. We do our best to hire good people (in a competitive market), we give them a little training, and then we HOPE they create raving fans. Ever heard the expression “hope is not a strategy”? READ MORE

Joyce Gioia

Worldwide, the hospitality industry is going through a transformation. In response to workforce shortages, many employers have looked for---and found---ways to reduce staff by using automation. Despite this trend, there are continuing shortages of skilled workers from front line housekeepers to general managers. Hospitality leaders are looking for and finding innovative ways to find the talent. This article will give you an overview of what’s working for general managers and their human resource professionals to find the people they need to staff their properties. READ MORE

Paul Feeney

A recent report from the U.S. Bureau of Labor Statistics, showed that close to 3 million people voluntarily quit their jobs a couple of years ago, a 17% increase from the previous year, proving that opportunities for employees are abundant and we have shifted back to a candidate-driven marketplace. Why is this important? Employee retention should always be of utmost importance, but requires awareness as to why employees leave to begin with. Numerous statistics show that the #1 reason people quit their jobs is a disconnect or poor relationship with their boss or immediate supervisor or manager. This shows that turnover of staff is mostly a manager issue. READ MORE

Coming Up In The April Online Hotel Business Review




Feature Focus
Guest Service: The Personalized Experience
In the not-too-distant future, when guests arrive at a hotel, they will check themselves in using a kiosk in the lobby, by- passing a stop at the front desk. When they call room service to order food, it will be from a hotel mobile tablet, practically eliminating any contact with friendly service people. Though these inevitable developments will likely result in delivered to their door by a robot. When they visit a restaurant, their orders will be placed and the bill will be paid some staff reduction, there is a silver lining – all the remaining hotel staff can be laser-focused on providing guests with the best possible service available. And for most guests, that means being the beneficiary of a personalized experience from the hotel. According to a recent Yahoo survey, 78 percent of hotel guests expressed a desire for some kind of personalization. They are seeking services that not only make them feel welcomed, but valued, and cause them to feel good about themselves. Hotels must strive to establish an emotional bond with their guests, the kind of bond that creates guest loyalty and brings them back time and again. But providing personalized service is more than knowing your guests by name. It’s leaving a bottle of wine in the room of a couple celebrating their anniversary, or knowing which guest enjoys having a fresh cup of coffee brought to their room as part of a wake-up call. It’s the small, thoughtful, personal gestures that matter most and produce the greatest effect. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.