A Revenue Manager's Guide to Surviving the Awkward Teenage Years

By Kelly McGuire Vice President, Advanced Analytics, Wyndham Destination Network | December 06, 2015

Revenue management is relatively new to the hotel industry. Hotels only really started to adopt revenue management processes and systems broadly in the late 90s and early 2000s. We've managed to achieve success and gain visibility over the last couple of decades, but we are a relatively young discipline in hospitality. In fact, it could be said that revenue management is still in its teenage years, and, in my opinion, we are definitely acting like it:

Hanging Out with the Wrong Crowd

Revenue management has been hanging with
the wrong crowd, particularly during the 2008 economic downturn. We snuck
out after curfew to hang out in the parking lot with a bunch of rogue
technology start-ups who promised a good time reaching new guests through
alternative, deep discount, channels. "Go ahead, sell 1,000 rooms at 50% off
with no restrictions. Everyone's doing it." or "Don't worry, your high
paying guests will never find that out you are discounting rooms 30% day of
arrival."

Experimenting

We have been experimenting with dangerous things. Like data.
Some of this data our parents already warned us about, like regrets,
denials, and weather. But there are new designer data sources too, like
reputation, customer lifetime value, and forward-looking demand. Some may
help us, some may be fun to play with for a while, but some may eventually
kill our forecasts and pricing recommendations.

Making Up Our Own Language

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Guest Service: A Culture of YES

In a recent global consumers report, 97% of the participants said that customer service is a major factor in their loyalty to a brand, and 76% said they view customer service as the true test of how much a company values them. And since there is no industry more reliant on customer satisfaction than the hotel industry, managers must be unrelenting in their determination to hire, train and empower the very best people, and to create a culture of exceptional customer service within their organization. Of course, this begins with hiring the right people. There are people who are naturally service-oriented; people who are warm, empathetic, enthusiastic, pleasant, thoughtful and optimistic; people who take pride in their ability to solve problems for the hotel guests they are serving. Then, those same employees must be empowered to solve problems using their own judgment, without having to track down a manager to do it. This is how seamless problem solving and conflict resolution are achieved in guest service. This willingness to empower employees is part of creating a Culture of Yes within an organization.  The goal is to create an environment in which everyone is striving to say “Yes”, rather than figuring out ways to say, “No”. It is essential that this attitude be instilled in all frontline, customer-facing, employees. Finally, in order to ensure that the hotel can generate a consistent level of performance across a wide variety of situations, management must also put in place well-defined systems and standards, and then educate their employees about them. Every employee must be aware of and responsible for every standard that applies in their department. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.