5 Foundational Skills of the Revenue Manager of the 'New Norm'
By Lily Mockerman Founder, Total Customized Revenue Management | July 2020
Revenue Managers these days have a tough job. Often not fully understood by their colleagues and provided with limited resources, these individuals are expected to have answers for financial top-line performance, dictate or influence guest policies, be a super user for most of the hotel's technology, communicate with everyone from front desk agents to ownership executives, and predict consumer behavior in a rapidly-changing environment.
In the interim, however, many companies have kept salary ranges stagnant despite these new, higher expectations. Recent job postings offer between $50-$75K while other executives are making at least 25% more. This is enough to dishearten any great Director of Revenue Management.
When the COVID-19 pandemic struck, there was more pressure to create cashflow and many revenue teams were furloughed. But in a way, the slate has been wiped clean. Companies have a golden opportunity to consider what kind of Revenue Manager will move them forward, and how to adequately compensate a talented Revenue Manager.
What's in a Name?
The hospitality industry has spent a lot of time trying to rename the Revenue Management discipline. Profit Optimization? Revenue Maximization? Commercial Strategy? This discussion needs to include more than a new title. The discipline needs to make important changes to create a different path.
- Strategy meetings often become stale, repetitive discussions without much actual strategy involved.
- Owners' meetings become politicized showcases in which the positive is highlighted and as many negative things as possible are swept under the rug.
- An inordinate amount of time is spent hashing and rehashing whether Best Available Rate should be at $239 or $219 on a specific date.
- Optimal mix and flow-through discussions are rare.
The sudden economic downturn from the COVID-19 crisis temporarily or permanently closed many hotels and put a significant financial strain on ownership resources. Focus that was slowly turning towards profitability versus just top-line revenue is making a much faster swing. As the saying goes, cash is king, and many companies had inadequate resources to weather such a drastic event.