Breaking Down Silos and Building Up Profit on the Quest for Total Revenue Management

By Paul van Meerendonk Director of Advisory Services, IDeaS Revenue Solutions | December 16, 2018

Booby traps and secret passages, solving puzzles and venturing into the unknown. The greater the goal, the harder the journey will be, and the pitfalls are aplenty as we chase the things everybody wants, but few can find. Whether our quests are personal or professional, aren't we all seeking a holy grail of sorts?

Down-to-earth business leaders at hotels and resorts probably don't feel like they have much in common with someone like Indiana Jones or Lara Croft, but attaining total revenue management for their properties is an ambitious mission, and one that may be treacherous.

How many years has this been the "hot topic" of the hotel industry? Professor Sherri Kimes of Cornell, ever the adventurer blazing a trail for hospitality revenue management, was pushing studies on restaurant revenue management and total revenue management dating back to 2004 and even earlier. 10 years later, IDeaS Revenue Solutions launched its Function Space Revenue Management Solution to help hotels expand their revenue management strategies beyond guest rooms. Yet, here we are in 2018, and total revenue management is still an enigma, wrapped in a puzzle, hidden away somewhere in a dark back office at a few select hotels or in the minds of quirky innovators at the corporate offices.

Few hotel companies have achieved a successful holistic revenue management strategy. Most hotels still manage revenue generating business units in isolation. The good news is that, as silos come down, total revenue performance comes into view. Hotels must adopt the tools and best practices that bring together key business stakeholders from marketing, sales, meetings & events, food & beverage, revenue management and operations to unify goals and profit potential.

Indiana Jones always faced three main obstacles on his quests: traps & puzzles, other adventure seekers, and team members with other agendas. Despite being in a wildly different line of work, leaders at hotels and resorts often face these same challenges in trying to implement total revenue management.

Traps & Puzzles

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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.