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:

AUGUST: Food & Beverage: Multiplicity and Diversity are Key

Larry Steinberg

The foodservice industry is one of the oldest and most important. Consumers from all demographics rely on it virtually every day for sustenance. In fact, in the U.S. alone, itís a nearly $800 billion industry thatís extremely competitive, with hundreds of new establishments popping up every year, and much of this new business is the result of increased consumer demand. Consumers want more options. For every practiced chef, there is a collective of guests eager to spend their hard-earned dollars on something exotic and different. They want to experience a bit of culture by way of their next meal, and they want to find it using the latest technology. READ MORE

Frank Sanchez

About two years ago, I started my career at the Chicago Marriott Downtown Magnificent Mile. I came from San Diego, California, the apparent capital of farmerís markets. When I moved to Chicago in late-October, the number of farmerís markets had already begun to taper off and all that was left of the hotelís rooftop garden was the sad remnants of a summer full of bounty. However, I was in for a pleasant surprise. The Chicago Marriott Downtown operates a year-round experience to create food from scratch that gives customers fresh and nutritional options. I was thrilled to join a team that can tell a customer that the very greens on their plate were grown just floors above them. READ MORE

Thomas  McKeown

To serve todayís eclectic, socially engaged and sophisticated guests, hotels and chefs need to get creative, change their thinking and push back some walls Ė sometimes literally. The fun thing about meetings hotels is that they are a different place just about every week. One week weíre hosting a bridge tournament, the next a corporate sales team, or a dentistsí conference, or sci-fi fans in costumes, or cheerleaders jumping for joy. You name the group, and our hotel has probably welcomed them. READ MORE

Elizabeth  Blau

Over the past several years, many of us have watched with excitement and interest as the fast-casual restaurant segment has continued to boom. More and more, talented chefs with fine dining pedigrees are bringing their skills, creativity, and experience to concepts built around speed, approachability, and volume. Right now, the ability to offer a gourmet experience at all price points is as compelling to restaurateurs and diners alike. READ MORE

Coming Up In The September Online Hotel Business Review




{300x250.media}
Feature Focus
Hotel Group Meetings: Blue Skies Ahead
After a decade of sacrifice and struggle, it seems that hotels and meeting planners have every reason to be optimistic about the group meeting business going forward. By every industry benchmark and measure, 2017 is shaping up to be a record year, which means more meetings in more locations for more attendees. And though no one in the industry is complaining about this rosy outlook, the strong demand is increasing competition among meeting planners across the board Ė for the most desirable locations, for the best hotels, for the most creative experiences, for the most talented chefs, and for the best technology available. Because of this robust demand, hotels are in the driverís seat and they are flexing their collective muscles. Even though over 100,000 new rooms were added last year, hotel rates are expected to rise by a minimum of 4.0%, and they are also charging fees on amenities that were often gratis in the past. In addition, hotels are offering shorter lead times on booking commitments, forcing planners to sign contracts earlier than in past years. Planners are having to work more quickly and to commit farther in advance to secure key properties. Planners are also having to meet increased attendee expectations. They no longer are content with a trade show and a few dinners; they want an experience. Planners need to find ways to create a meaningful experience to ensure that attendees walk away with an impactful memory. This kind of experiential learning can generate a deeper emotional connection, which can ultimately result in increased brand recognition, client retention, and incremental sales. The September Hotel Business Review will examine issues relevant to group business and will report on what some hotels are doing to promote this sector of their operations.