Is Your Organizational Structure Maximizing Your Revenue Potential?

By Paul van Meerendonk Director of Advisory Services, IDeaS Revenue Solutions | July 10, 2016

The evolution of the revenue management industry has been one of 2016's top trending topics. From the onslaught of big data opportunities to the drastic improvements in the life of the revenue manager, the benefits of revenue management practices and its sophisticated technology have been far-reaching in leaving virtually no revenue stone unturned. However, advanced technology has been accommodating far more in this industry's evolution than high consumptions of complex data and the bolstering of on-the-job productivity. As the industry continues to propel forward with better insights and more informed strategic opportunities, we've also seen a distinctly marked shift in how the role of revenue management is positioned within the organizational make-up of hotel(s) and hotel companies.

Looking closely at the revenue management industry's past organizational structure, it's clear to see that revenue management roles within a hotel's ranks have evolved significantly over the years. From departmental role reversals to critical new job functions to how technology can supplement hotels with limited head counts, there has been no shortage of organizational changes within revenue management. So what exactly does the organizational structure look like now, where is it headed in the future and what are the opportunities for hoteliers to use the industry's technology and resources to fill their organizational gaps?

Revenue Roles Through the Looking Glass

  • Revenue Management and Sales & Marketing

One of the largest organizational structure shifts to date can be observed by evaluating the dynamic relationship between the revenue management and the sales and marketing departments. While the revenue management department may have directly reported to sales and marketing in the past, they may now find themselves reporting to the hotel's general manager or a hotel companies chief operating officer instead. This organizational shift can be considered quite telling in terms of how the hospitality industry has strongly embraced the practice of revenue management for not only boosting bottom line profits, but for encouraging its revenue culture to permeate throughout the entire organization.

How else has the relationship between revenue management and the sales and marketing team been changing? Many organizations have also been experiencing a role reversal between the two departments. Rather than revenue managers reporting into the sales and marketing department (which has historically been the case), the sales and marketing organization is now seeing their reporting structure shift under the umbrella of the revenue management department. The sales organization itself has also been experiencing its own evolution over the recent years - and it has been interesting to observe the changing role of the hotel sales manager and sales team. With the complexity of distribution and digital marketing commanding a larger precedence than before, hotels are beginning to see their revenue and digital teams growing and their traditional sales teams starting to shrink.

Choose a Social Network!

The social network you are looking for is not available.

Close

Hotel Newswire Headlines Feed  

Jeff Slye
Simon Hudson
John Tess
Jason Ferrara
Nelson Migdal
Magnolia Polley
Josiah MacKenzie
Robert Gilbert
Adria Levtchenko
Lily Mockerman
Coming up in May 2019...

Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.