Is Your Revenue Manager a 1st, 2nd or 3rd Generation Revenue Management Professional?
By Bonnie Buckhiester President, Buckhiester Management Limited | September 2012
Today, consumer buying behavior is evolving so rapidly Revenue Managers must feel like they are trying "to shoe a horse on a dead run". Not to mention that technology is more complex, distribution options multiply day by day and business intelligence reports are seemingly limitless. How does a revenue management professional keep pace with this change and the associated complexities?
The answer is they don't. No one can possibly stay abreast of these changes, much less discern which trends are for real and which will evaporate when the next newest phenomena emerges. As a revenue management specialist, I can't keep up with the plethora of new information, technologies, and best practices…and I do this for a living…all day every day.
So what is a Revenue Manager to do? And how does a hotel or hotel company determine whether their revenue management resources are first, second or third generation professionals?
We must begin to answer this question with an explanation. When speaking of a "first generation" revenue manager, I refer to those individuals who were literally given the revenue manager title when it appeared to hotels there should be someone in charge of managing demand. In many cases this was a reservations supervisor or manager. Some of these people did make the leap to revenue management, but many did not. Hotels eventually realized that the traits of a good reservations manager where not the same as those of a good revenue manager.
In addition, the need to be technologically savvy was also evident as distribution evolved from a semi-restricted environment of PMS/CRS/GDS to PMS/CRS/GDS/Website/OTA/Onward distribution and niche sites.
These were our first generation revenue managers and they pioneered the management of an ever-changing online landscape; often finding their inventory showing up on the Web in places they didn't know existed or even how their room availability got there in the first place. Business intelligence consisted largely of internal spreadsheets and monthly STAR reports (Smith Travel Research). And communication with marketing was sketchy, so much so that reservationists were sometimes the last to know about a new marketing initiative.