Profile of the New Revenue Manager
A Movement From Descriptive to Prescriptive
By Kelly McGuire Vice President, Advanced Analytics, Wyndham Destination Network | November 15, 2015
Revenue management is taking on a more strategic role in the hospitality industry, with growing responsibilities and new opportunities to expand the discipline and its influence. In the midst of this evolution, one thing remains constant: the person who fills the revenue management role is the key to a successful revenue management program. This role requires an analytically minded leader, who can successfully work across the organization to drive results.
Revenue management has traditionally been a detail-oriented, analytical discipline obsessed with data and consumed with spreadsheets. The more analytical, the better. Even as few as 10 years ago, revenue managers were building their own revenue management systems in Excel, and running the pricing of large hotels entirely using spreadsheets. As the discipline has matured, the tools and technology have become more sophisticated and the role has expanded, the requirements to be successful in the job are continuing to evolve.
It is important to remember that analytic solutions are decision support tools. They may be configured by analysts, but the results are consumed by intelligent managers who have the experience to interpret the results and take the appropriate actions. Revenue management systems drive revenue because revenue managers can interpret the price and availability recommendations as part of a broader pricing strategy. The job of the revenue management system and the revenue manager are not the same. A hotel cannot simply hook up the revenue management recommendations to their selling system and walk away. However, a great revenue management system managed by a business-savvy revenue manager is a winning combination.
Recently, a revenue leader from a large hotel brand told me that one of the driving factors for their business analytics programs is to get better information into the hands of their senior executives faster. "Imagine how much more effective smart and charismatic leaders would be in a contract negotiation, internal strategy discussion or owners meeting if they had instant access to key performance metrics that can be sliced and diced to support whatever direction the conversation may go?," she pointed out. "We have very experienced leadership, but I'm sure they could drive more revenue with access to better information, faster." It's not that the information itself doesn't exist. There are always standard sets of reports available. The problem is that if a question is asked beyond the scope of the existing report, whether it requires additional data or a different view of the existing data, the additional data access and ad hoc analysis is usually time-consuming, not instantaneous. The advantage that faster and more flexible analytics provide is in the speed of access to the information, and the flexibility of the output. Delivering this is beyond the capability of most organizations today.
The primary purpose of decision support systems are to augment the existing experience and acumen of a top-performing executive, providing information for them to better interpret a situation, reinforce a point, convince an investor or make a key business decision. The right decision support tools, backed by credible data and advanced analytics are important, but it the right person in the role of interpreter and decision maker is crucial.
This is why I argue that we are at an inflection point in hotel revenue management. We are moving through the chain of analytic maturity, and we are getting to the point where we will need a different type of revenue manager to move forward and stay ahead. As the needs of the business change, the skills sets and competencies of the revenue manager must evolve as well. In the next section I will walk through the three stages of analytical decision making and describe how revenue managers must continue to evolve to keep organizations successful in today's competitive environment.