Revenue Management Team
In the hospitality industry, it is essential to have a revenue a management team in place to capitalize on the market and profits. There is more competition than ever in the industry as well as more channels for travellers to book. Revenue management is the process of using data to predict consumer behaviour in order to enhance product availability and increase revenue.
For example, Fred is the general manager of a local hotel. He needs to know the probability of selling out next week. His revenue management team provides him with data including pricing of competitors, the demand in the market, and availability in the market. This helps Fred decide on pricing for this hotel in order to maximize his revenue. The revenue management team can consist of a revenue manager, operational management, the sales team, and the line level employees. We will take a look at how each member of the team plays a role in the revenue management of the business.
Revenue Manager
Every revenue management team has a revenue manager. This is a role that has developed over the years as the hospitality industry has seen the need to use revenue management. At one point the operational teams were in charge of revenue management before the creation of the revenue manager. Now there is a need for a revenue manager that is only focused on the revenue management of the business.
The primary role of the revenue manager is to maximize the businesses’ opportunity for revenue and profits. In order to do that, the revenue manager is in charge of compiling and analyzing data to make decisions regarding pricing. The revenue manager compiles data on the business as well as the competition. They keep up with market changes and identify trends.
For example, a hotel in a corporate location will see high demand for hotel rooms during the week versus on the weekend. This is a trend that a revenue manager would be aware of and take into consideration when setting pricing. The revenue manager is in charge of setting rate strategies that will help the business capitalize their profits. The revenue manager will know what the competition is selling and how the competition is fairing.
For hotels, there is an STR report that comes out weekly that compares 5-7 hotels in the area and gives the hotel data on how they are doing compared to their competition when it comes to revenue. This is a highly used report for revenue managers in the hotel business. If the hotel is not keeping up with competition, then it lets the revenue manager know they need to change their strategies. The focus of the revenue manager is knowing what is going on around them in order to be able to react and price correctly.