The Revenue Manager of the Future: How to find the right talent
By Kelly McGuire Vice President, Advanced Analytics, Wyndham Destination Network | April 01, 2012
It is clear that hotel revenue management is taking on a more strategic role and that the discipline is moving from traditional inventory optimization to price optimization. In the midst of this evolution, one thing remains constant; the person that fills the revenue management role is the key to a successful revenue management program. This role requires an analytically-minded leader, who can successfully work across the organization to drive results. In this article, I'll discuss the skills and experience you should watch for when hiring or developing revenue management capabilities within your organization.
Cross et al (2009)(i) provide an overview of the evolution of RM in the lodging industry, from the inventory-focused role it played in the late 1980s and 1990s, to the post-9/11 shift toward a more expansive role within the organization. Historically, revenue managers were tasked with opening and closing predefined room rates based on predicted demand such that the best combination of occupancy and rate was achieved for any given night. More recently, RM has begun to evolve from this tactical orientation to a more strategic role that encompasses marketing, sales and channel strategy. With this evolution has come a broader set of responsibilities across a number of domains including pricing, management of the entire revenue stream (total hotel revenue management), and a customer-centric approach to developing demand. The background and skill set of an "ideal" revenue manager has evolved along with the discipline.
Sherri Kimes (2010)(ii) conducted a broad survey of revenue management professionals to understand the future of revenue management from the industry's perspective. In her research she identified the direction that the discipline will take and the skill sets that revenue managers of the future will need to be successful. The following list of skills is taken from her research and my experience.
• Analytical: Revenue management is an analytical discipline, and is becoming even more so as it evolves from inventory optimization to price optimization. Even if you are using an automated revenue management solution, the revenue manager will need to be able to interpret the results, adjust them as necessary and conduct ad-hoc analytical analyses to support special projects. Your revenue manager should be very comfortable with analytic techniques like forecasting and predictive modeling. Look for a background that includes some statistics or operations research or, at a minimum, previous experience that included working with numbers.
• Good communication skills: Sherri Kimes calls the ideal revenue manager a "geek who can speak". Not everyone in the hotel is, or will be, analytically minded. An ideal revenue manager will be able to clearly and effectively translate complex pricing concepts into understandable actions. In order for the revenue manager to be successful in a strategic role within the organization, they must be effective and persuasive communicators.
• Data-minded: Successful strategic pricing decisions require gathering and interpreting data from a multitude of sources. The revenue manager must be comfortable with data – where it comes from, how it is collected, how to identify and overcome data quality problems, and how to adjust for missing information. Data is never perfect, so a good revenue manager will be able to identify strengths and weaknesses of data sources that support strategic decision making.