What Highly Skilled Revenue Managers Have in Common
Author: Erin Butler, Revenue Manager
As a revenue manager for Regency Hotel Management, I have a lot of shoes to fill. I work on pricing strategies, distribution, business development, collaborate with leadership, and support marketing. (Of course I’m backed by a team of talented hotel professionals.)
Now that I’ve been in my current role for 12 years and with Regency for 19 years, I’ve noticed a few things revenue managers with mad skills have in common.
Revenue managers always have to be watching trends in the global economy, the hotel industry, with competition, and with the hotels they’re managing. With so much information to seek and digest, it can be hard to keep up. That’s why the best RMs have some handy tools in the bag.
Google Alerts, which auto feeds news you request directly into your email Inbox, make it easy to track specific topics—especially those related to your properties. If you’re based in Sioux Falls, like me, and a journalist writes a column on one of your hotels in Minneapolis, you’ll know.
You can also gather insights from online travel agencies and travel review sites, such as TripAdvisor. This can also be an easy way to get a quick glance at your competitors in the same city. Guest reviews can have a wealth of knowledge. Look for repetitive words, both positive and negative, when deciphering trends.
The global economy also has a profound impact on our industry. Revenue managers shouldn’t just follow industry publications like Tnooz.com and eHotelier.com, but widely distributed sources like The Economist or The New York Times.
This last part is the most important one: If trends start to emerge, make note of it in a spreadsheet and date it. This will come in handy later.
After gathering information, it is time to analyze trends—the why behind everything. Looking at last year’s data and the why behind it won’t let you get the false security that comes with letting the past predict future success. When are you losing guests and at what price? Watch when potential guests drop out of your booking funnel in your analytics. Then get to the why behind it.
This is where a small dose of skepticism can come in handy. Instead of looking at your data’s year-over-year trends such as number of bookings, types of rooms booked, and revenue to make future predictions, you also need to look at what was going on at that time. What was happening in the economy, near the hotel location, and with competitors? If you track notable trends over the course of the year, you can pick out the outliers in your data or plan for the same events to happen again.
The most successful revenue managers I know are a little competitive. This is not an easy skill to teach. (In fact, I’m not sure it can be taught.)
You always need to have a drive to do better in your role and make your hotels better than the competition. If your competitors are advertising a lower rate, specials, or technology, put a plan in place to keep up. That doesn’t mean you’re going to throw money at things that might not be a good fit for your hotel. It simply means that you want to win more business than your competition by staying ahead of guest expectations.
You can also ask your hotel staff to find out from guests what they love and where they see the need for improvement. You can also do this by looking at online reviews.
Sales and marketing know-how
While this might seem outside a revenue manager’s jurisdiction, it’s actually really integrated. Looking at your data, is it telling you that customers are coming back? Or are you only getting new ones? According to KissMetrics, “globally, the average value of a lost customer is $243.” It can also cost 7 times more to get new guests. You want to make sure customers are coming back.
According to a 2013 Deloitte survey in The New York Times, 8% of respondents always stayed at the same brand of hotel. If you can use that as a generic industry benchmark, is your hotel way off? Of course, every property will have its own unique situation, but it’s good to watch.
Knowing where your pain points are can help you advise your leadership team in allocating marketing dollars. If you’re having trouble retaining guests, place your focus on helping your teams get guests to come back. Communicating your findings with these decision makers is key.
Big picture outlook
While being a revenue manager is about managing several smaller picture tasks, the big picture must stay top of mind—your customers. Yes, your goal is to grow properties, and it’s easy to get lost in data and trends. But always remember to focus on what matters to your guests. Profit is crucial, but it’s your customers that will help you grow.