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Revenue Management

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How Technology Impacts Revenue Management Skillsets, Tactics and Techniques

By Jenna Smith, Vice President of Revenue Management, First Hospitality Group

You do not have to be a hospitality professional to recognize the influx and impact of new technologies in the hotel industry. Guests are becoming familiar with using virtual room keys on their smartphones to check in, and online resources like review sites and online travel agencies (OTAs) continue to shape the way consumers make decisions and book rooms. Behind the scenes, sales and marketing professionals are using new tools to communicate with guests, enhance operational efficiencies, and improve service by addressing guests' needs and solving problems quickly and with a minimum of disruption.

But one of the most important places where technology is making its presence felt in the hotel industry is in the revenue management space. Advances in technology and a long-and growing-list of powerful and innovative new tools have helped automate large portions of revenue management. At the same time, however, those same tech tools have also inundated hoteliers with more data than they know what to do with (literally). The inability to keep up with and/or process what can be a firehose-type quantity of information can be overwhelming. In some cases, the abundance of available data can actually cause as many problems as it solves. For hotel owners and operators, appreciating how technology has changed the revenue management landscape in recent years-and understanding how hoteliers are working through the deluge of data to make it relevant, meaningful and usable-is an increasingly important piece of the hospitality puzzle.

New Tools and New Skills

While the range of new and emerging revenue management-specific tools and technologies is vast, there is one consistent theme: more. More information, more data points, and more specificity¨, promising more precision and more ultimately more informed and strategic decision making.

One of the byproducts of this trend is that the world of hotel revenue management looks very different today than it did just a few short years ago. Perhaps not surprisingly, the large number of technology advances and the changes they have wrought now require and reward a very different skillset than in the past. As recently as 5 or 10 years ago, revenue management professionals needed to be extraordinarily detail-oriented and analytical. Today, while those attributes are obviously still important, they have been superseded by a very different (and sometimes elusive) new skill: the ability to quickly interpret large volumes of data-and to subsequently sell that interpretation to the team to get a quick buy-off.

The ideal revenue management professional in today's increasingly tech-heavy industry is able to strike a fine balance between efficiency and attention to detail, parsing through incredibly detailed reports to zero in on key metrics. A background in sales is helpful, enhancing the ability to speak to hotel management teams from real-life experience. One of the tricky issues to navigate when the data sets are evolving so rapidly is that many members of the sales team-up to and including the general manager-are accustomed to operating with benchmarks based on traditional metrics. In some cases, they are compensated based on those metrics. Consequently, the best revenue managers cannot simply just throw data out there and expect it to get traction with the sales team-they need to sell it: explaining why it is meaningful, and backing up their assertions with convincing detail. With that in mind, revenue management professionals with prior hotel experience can be valuable. Despite the stereotypical number-crunching nature of the position, revenue management leaders should also have a proven ability to connect with fellow members of the management team. Technology has increased the need for high-end technical and analytical skills, but it has also increased the value of advanced intuitive and interpersonal skills.

Inevitably, those shifting priorities and the need to prioritize talented professionals with new and different skillsets leads to a corresponding evolution in recruitment and hiring profiles. Those hotel owners and operators who can more readily adapt to these realities, recognizing the importance of the ongoing tech revolution in revenue management, will likely find themselves ahead of the curve. Ironically, at a time when technology and automated systems are playing an increasingly important role in revenue management, talent is arguably even more of a differentiator than ever before.

Different Types of Intelligence

Powerful and sophisticated technology has helped bring Big Data into the hotel industry. In a remarkably short of amount of time, the paradigm has shifted from needing more information to potentially having too much information. Technology does not decrease complexity-in some cases it has increased it. Consider the remarkable fact that the average hotel makes use of only around 12% of the data available to it. The challenge now is to identify the signal in the noise, avoiding data overload and making sense of the information that these new tools provide.

The proliferation of new business intelligence tools adds an additional layer of complexity to the challenge of data interpretation. Revenue management professionals frequently need to have an additional internal process to consolidate different sources of information, or identify and extract relevant data from different reporting platforms. There are so many new tools and technologies spitting out detailed data, but that volume of information is useless if your revenue management team can't zero in on the critical details for your property.

Even the best reporting tools may not present information in a format that is compatible with existing internal systems. Others may not even necessarily show year-over-year variance. One of the biggest challenges for revenue management professionals operating in a world of big data is the need to put new sources and new volumes of information into context. With data largely provided by hotel brands, hotel management professionals need to make that information work for them. The data is almost always there, but it is not always sorted or presented in a visually intuitive and easily accessible format. For example, the revenue management team may need to develop internal tools and processes to consolidate several different reports into a single unified presentation for comparison and context.

All of that inherent variation in an exploding field of hi-tech tools means that revenue management professionals also need to be adaptive and self-motivated learners. The best display high-end problem solving skills, professional curiosity and a willingness to work through the process as new tools come online. Today's revenue management professionals need to able to train themselves in new and emerging technologies, continually relearning new platforms and new iterations of existing technology tools which come out every year.

A New Kind of Fluency

It is not just revenue management tools that are becoming more powerful and more sophisticated with each passing year. Consumer facing tech tools are evolving, as well, and hotel guests are using new resources and new booking tools, platforms, services and online resources. Revenue management professionals also need to be conversant with those technologies, as well. Becoming not just familiar, but fluent with those tools is vital at a time when a significant percentage of your guests are booking through those channels. Without that expertise, revenue management professionals will find it difficult, if not impossible to counsel clients and keep fellow management professionals informed.

The revenue management team is consequently a little more involved in the sales process than in the past. Revenue management professionals need to be conscious of how people want to book (and even why those preferences exist). Sometimes that involves technology, going online and making your booking through an efficient, impersonal process-and sometimes people want that personal engagement and interaction during the booking process. Understanding the nuances of those preferences, how they apply to your guests and your property, and how they evolve from year to year, is an unavoidable and essential aspect of revenue management today.

Systems and Subjectivity

One tremendously important caveat that revenue management professionals and hotel owners and operators all need to be aware of is that technology does not reduce the human element: making new technology work for you and your property still involves an enormous amount of personal engagement and professional interpretation. Even the best and most powerful new revenue management technologies have a great deal of structural subjectivity and property-specific input. This is something that all too often gets overlooked when new systems are touted and the capabilities of new technologies are pitched as game-changers. The most optimistic projections and pronouncements are made with the assumption that the system is set up correctly and fully optimized for your property. And, because there is so much subjective information that can go into the system (identifying who your competitors are, determining who you should be price-marking against, predicting how big a particular event will be, forecasting the bottom-line results, and much, much more). Ultimately, today's new revenue management technologies can tell you an extraordinary amount of valuable information about your brand and your business. But to unlock that potential and generate those new insights, you first have to take the time and do the hard work required to fully understand yourself.

Jenna Smith started as a guest services representative in 2004. She has been on a fast track moving up through the company ever since. Ms. Smith has served in a wide variety of positions, from sales roles to general manager. As vice president of revenue management she is responsible for the delivery of support for multiple brands and the leadership of a regional support team, as well as development and execution of effective strategies to achieve market share growth. Ms. Smith ensures that First Hospitality Group has a voice in the growth and development of all our brands. Ms. Smith can be contacted at 214-855-6000 or jsmith@fhginc.com Please visit http://www.fhginc.com for more information. Extended Bio...

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