The Young Revenue Manager!
What is revenue management and more importantly, what does revenue management mean to a young professional in the hospitality industry? This is a question that I have been asked by many colleagues during my internship and ultimately, a question I have found myself asking. Simply googling the definition will give you the satisfaction of knowing that it is the practice of “selling the right product, to the right person, at the right time for the right price, through the right distribution channel.” In essence, this is what it comes down to and as a student, I was content with this definition.
Throughout my last two years of university, I was confident that I knew what revenue management was all about. I wrote a 50-odd page assignment with a whole list of room types that I would sell at a certain rate to a certain segment of the market. Although this built a good foundation for me to continue with my studies in revenue management, I now find myself questioning what it truly entails to be a young revenue manager.
It is important to note that I am not a revenue manager in itself but instead a revenue management Intern who has spent the last three months observing and learning from two well experienced and dedicated revenue individuals. One, a revenue analyst and the other, her revenue manager.
So, revenue management as we all know came from the airline industry and has now found itself in the hospitality industry as one of the key leadership positions in today’s hotels. In essence, a revenue manager has a real say in what is going on. So much so, that in my initial interview, my manager said that I would need to be prepared for a holistic revenue management approach. Of course, I thought I knew what that meant, and to an extent I did. I know that there is potential revenue to be made in all facets of the hotel and many revenue managers know that revenue management is not just the yielding of rooms anymore. However, many managers are still stuck in the mindset of maximizing revenue through the rooms division while missing out on huge potential profits through every other department. Revenue management is one role that gives you the chance to spend time in all departments of the hotel and if you play your cards right, this role allows you to do a lot more than just sitting in an office. However, if you don’t take control and don't wish to see the true revenue-generating potential throughout the hotel, revenue management can quickly turn into a mindless exercise that requires you to input data into algorithms.
So, while revenue management in the hotel industry is still relatively young and there is a great demand for revenue managers, the concept of revenue management has grown exponentially in the last decade with the development of technology matching this pace. As a young revenue manager, technology can be seen as a lifeline. Reducing the monotonous hours spent pulling reports and building formulas. However, having technology catch up with us has ultimately reduced the influence that we have on revenue management, while it is eliminating the grassroots of true revenue analytics. Right now, we see this as being beneficial, but I can already see the impact of having the work being done for me. If this advance in technology continues to grow at this speed, our next generation of revenue managers will have no understanding of where this data has come from. They will just be presented with graphs highlighting times of high and low demand with a suggested rate to be offered.
On the other hand, I have personally identified this threat for my future career, driving me to be proactive and to be aware of these future obstacles. With this, there is still a lot of positives to come for future revenue managers as suggested by Patrick Landman, the CEO & Founder at Xotels (Landman, 2018);
1. Revenue management is moving up a notch.
Many hotels understand that the valuable service of analytical and strategic knowledge can only be provided by this department, resulting in revenue managers seeing an increase in their participation in executive committees.
2. The role of revenue management will continue to expand.
Revenue management is undergoing constant change, to a far greater extent than other departments due to its close links with technological capability.
3. Revenue management has expanded into other sectors.
Revenue management will become an influential part of other revenue-generating areas in hotels such as hotel restaurants, venue hire, room service and leisure facilities.
Ultimately, revenue management is becoming so much more than just an office job, if you choose to see it for its full potential. It is becoming imperative for young revenue managers to develop a real understanding of the operations throughout the hotel and we need to avoid the trap of being dependant on technology. Instead, we need to see the value of technology as an assisting aid to our daily tasks.
Bradley Barrett | LinkedIn