Top 5 Questions Hotel Owners Should Be Asking About Revenue Management
By Kristie Dickinson Senior Vice President, Business Development & Marketing, CHMWarnick | October 25, 2015
As hotel asset managers, we ask a lot of questions. Separating the average asset managers from the indispensable ones, is the ability to ask the right questions. What are the right questions, you ask? The right questions do a number of things…for one, they challenge the status quo, shake things up and really make people think – why are we doing it this way, how else might this be done, is it working and what should we change?
Questions should also evoke discussion about where you are today, but more importantly where you want to be in the future and how to get there. Hotel operating teams represent the "on-the-ground" experts, possessing unparalleled knowledge about the market and demand dynamics unique to their hotel. Asset managers and/or owners can leverage this expertise by asking questions that spark dialogue, lead to further exploration, a sense of joint ownership of the issues and collaborative efforts to achieve desired results.
So, what does all that have to do with revenue management? (Great question, by the way.) Revenue management has been the subject of many headlines, discussed regularly at conferences and critical to the success of any hotel operation today. Despite advances in technology; the emergence of companies specializing in the discipline (Rainmaker, Kalibri Labs and Duetto, to name a few); an elevation in the perception of the role of revenue managers; and, a multitude of other factors advancing the focus on revenue management, there still exists a wide spectrum of abilities and practices employed at both the property and corporate level. A general lack of consensus on the best approach, systems and structure, coupled with consumer products and services serving to undermine traditional strategies, makes revenue management an area that warrants constant attention….and yes, a lot of questions.
The following are five key questions that hotel owners or asset managers should consider asking again, and again, and again…
Revenue Management – Is it a Position or a Philosophy?
A reliable indicator of how focused an operating team is in revenue management includes understanding who is responsible for optimizing revenue, and hopefully, the answer will include more than one individual. The Director of Revenue Management should be in charge of the analysis, supporting strategies and on-going recommendations surrounding rooms inventory distribution and pricing, but should also interface and strategize regularly with the other operating departments. The ultimate goal is to have the entire hotel focused on optimizing revenue (and profits), through specific strategies that can be applied and spearheaded by department – pricing and seating practices at the restaurant, services and treatment pricing at the spa, space utilization within banquets and catering – all departments should be actively engaged in revenue management and in sync with forecasted volume of business and pricing.
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