Building the Bench: Developing the Next Generation of Revenue Leaders

By Harry Carr Corporate Director of Revenue Management, Pivot Hotels & Resorts | October 07, 2018

At the HSMAI Revenue Optimization Conference this year, there was a "great debate" over the future of Revenue Management. Will hotels in the future rely on Directors of Revenue Management (DORM) to implement the strategy, or will machines rule the world as revenue management systems such as Ideas, Duetto, and One Yield become more and more sophisticated?

I was firmly in the camp that believes that DORM's are here to stay, but there is no doubt that advanced algorithms using the enormous volume of data now available will make decisions more quickly and accurately than the human mind. Fortunately for those of us in the discipline, we are not merely number crunchers; the skills needed for success have evolved along with the technology.

The changing landscape of hotel revenue management requires a new approach to training and development in which the next generation of revenue leaders cannot be chosen solely based on their knowledge of the property management system (PMS) and central reservations system (CRS). Reservations Supervisors or Managers and Revenue Analysts will continue to be a pipeline for talent, with the most critical skills including communication to all stakeholders, driving hotel revenue and generating profits for owners, willingness to take risks, and the ability to lead integrated marketing efforts. The hospitality industry has always valued the training and development of the Sales team, but it is now time to expand that focus to the DORM's.

Communication

One of the traditional weaknesses of revenue leaders is translating highly technical revenue strategies to those that may not share the love of data, such as the Director of Sales and Marketing who doesn't want to stare at 15 spreadsheets. Asset Managers need to understand how market conditions, pace, and business mix are impacting their pocketbook or stock price, often in meetings that are limited to an hour a week. General Managers need to understand how occupancy percentage will determine staffing levels and how distribution costs will impact flow through.

The first step to improving communication is to open the weekly revenue meetings, profit and loss reviews, and ownership meetings to a broader audience. Exposing less seasoned managers to the entire process pulls back the curtain, revealing the mystery of pricing and positioning while adding diverse voices to the conversation. The sharing of skills is also an essential part of developing well-rounded team members, and at Pivot Hotels & Resorts we have paired Revenue Managers of varied yet overlapping backgrounds that communicate on an informal and regular basis. From a practical standpoint, the buddy system helps cover vacations and provides backup, but we have also found the exchange of ideas offers a perspective from outside the individual hotels.

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Coming up in March 2019...

Human Resources: An Era of Transition

Traditionally, the human resource department administers five key areas within a hotel operation - compliance, compensation and benefits, organizational dynamics, selection and retention, and training and development. However, HR professionals are also presently involved in culture-building activities, as well as implementing new employee on-boarding practices and engagement initiatives. As a result, HR professionals have been elevated to senior leadership status, creating value and profit within their organization. Still, they continue to face some intractable issues, including a shrinking talent pool and the need to recruit top-notch employees who are empowered to provide outstanding customer service. In order to attract top-tier talent, one option is to take advantage of recruitment opportunities offered through colleges and universities, especially if they have a hospitality major. This pool of prospective employees is likely to be better educated and more enthusiastic than walk-in hires. Also, once hired, there could be additional training and development opportunities that stem from an association with a college or university. Continuing education courses, business conferences, seminars and online instruction - all can be a valuable source of employee development opportunities. In addition to meeting recruitment demands in the present, HR professionals must also be forward-thinking, anticipating the skills that will be needed in the future to meet guest expectations. One such skill that is becoming increasingly valued is “resilience”, the ability to “go with the flow” and not become overwhelmed by the disruptive influences  of change and reinvention. In an era of transition—new technologies, expanding markets, consolidation of brands and businesses, and modifications in people's values and lifestyles - the capacity to remain flexible, nimble and resilient is a valuable skill to possess. The March Hotel Business Review will examine some of the strategies that HR professionals are employing to ensure that their hotel operations continue to thrive.