A Day in the Life of Two Revenue Managers
By Paul Van Meerendonk, Director - Advisory Services at IDeaS Revenue Optimization
Recent discussions have been swirling around the revenue management industry and its swift evolution over the past few years, moving steadily past merely filling as many rooms as possible to holistically approaching the quest for achieving total revenue performance. However, approaches and technologies have not been the only revenue management components swept up in these influential winds of change. The lives of hotel revenue managers have also experienced drastic changes in not only their job responsibilities, but in their overall work efficiencies, insights and performance.
To expound on the impacts that technology has brought to the lives of modern day revenue managers, let's examine a typical day in their life - a life with an automated revenue management system and a life still relying on manual spreadsheets and home grown processes.
A Day without Automation
A typical morning routine for most revenue managers begins by reviewing their hotel's performance from the previous day. Without an automated revenue management system (RMS), a report is likely pulled from the hotel's property management system (PMS). This report accounts for the property's out of order rooms, no-shows and actuals from the day before. It includes the necessary data points to allow the revenue manager to begin investigating any changes in hotel bookings since the day before.
Once the hotel's daily performance has been thoroughly reviewed, it is generally a suitable time to meet with the hotel sales team to discuss any group opportunities they have in the pipeline. To assist the revenue manager, s/he generally maintains a "business-on-books" folder (sometimes referred to as "BOB.") BOB is referenced during all internal revenue meetings, in this case helping the revenue manager and the group sales team decide if their prospective group business is worth taking - and at which rates they should accept each group.
The revenue manager generally spends some down time throughout the day reviewing BOB, looking at changes in the bookings week over week. S/he spends critical time manually updating spreadsheets with PMS reports, reviewing the forecast a minimum of 90 days in the future for any immediate changes to hotel pricing. After this daily review, it can be an optimal time to check in with the general manager, front desk and operational teams to communicate any relevant changes to forecasts and pricing. If there are any rate changes needed, the revenue manager will spend time manually adjusting these in all selling systems, often as detailed as adjusting rates by room type for each day.
In an ideal world, the revenue manager breaks for lunch and gets a much needed refresher hour before resuming the afternoon's activities. In many hotel worlds, however, the revenue manager ends up spending their lunch eating at their desk, pouring intensely over BOB and preparing intently for the revenue meetings that afternoon.
The next hours find the revenue manager continuing to update excel spreadsheets with on-the-books pace for two to six months in the future, competitor rate shopping information (from a report emailed through their web shop vendor), PMS pick-up report information, upcoming special events, and actuals (both compared to budget and last year.) Once the spreadsheets are updated with the newest information, the revenue manager critically evaluates and consumes the freshest information at hand, which includes consulting with competitive set reports in an effort to try to understand their competitors' potential pricing strategies.
Afternoons are comprised of meetings with the leadership team to discuss current key performance indicators (KPIs) and strategizing for any soft or heavy demand time periods on the horizon. Since BOB isn't maintained at a segmented level, they rely only a breakdown of the total hotel, total transient and total group levels. The revenue manager also sits in on group pick-up meetings with the internal departments to review and account for any recent changes to group inventory. At the end of the day, the revenue manager tucks BOB away for the evening and heads home - hoping not to get an emergency call to lower the weekend rates. After all, wouldn't it be great if it was possible to change rates from the convenience of a mobile device?
A Day with Automation
This typical day also starts with the revenue manager reviewing their hotel's performance from the previous day. Since emails are scheduled via the RMS to deliver custom reports each morning, the revenue manager checks this information quickly after logging into the computer. Some mornings even find the revenue manager checking the emailed stats from their mobile phone even before they hit the office.
Since group sales meetings have been replaced with the group pricing capabilities in the RMS, the revenue manager spends a portion of that time reviewing the relevant group business sent out directly from the system. This is also an optimal time to review the pick-up and change report that was emailed that morning. Listing all the changes in bookings since the previous day, a quick review lets the revenue manager know if there are any recent changes to investigate. With the RMS report including detailed information for various segments, it's quick to spot any discrepancies. Seeing a future decrease of 20 rooms over a three-day time period, the revenue manager sends an email to the front desk to see if a group room block expired and whether a rooming list was coming soon.
A mid-morning break to check emails is an optimal time to see if any of the departments have questions on the forecast or hotel performance after reviewing their automated morning reports. Seeing that the general manager had a question on why an upcoming weekend rate increased, the revenue manager was able to quickly generate a report showing the rise in booking pace for the date in question. A swift review of the integrated competitor pricing also shows that nearly all of their competitors have increased their rates as well. Since this web shop data is integrated into their pricing decisions, the system was able to incorporate this immediately and adjust their price in accordance. Knowing that the general manager consumes data visually, the revenue manager exported a couple of graphs to illustrate what was happening in the market.
In an ideal world, the revenue manager breaks for lunch and gets a much needed refresher hour before resuming the afternoon's activities. In many hotel worlds, however, the revenue manager ends up spending lunch reviewing reports for a weekly meeting that afternoon. In this case, the revenue manager did take 15 minutes to sneak over the restaurant's soup and salad buffet before returning to their desk.
With the leadership team having reviewed KPIs from their weekly reports prior to the afternoon meeting, much of the hour is instead spent discussing strategies, marketing initiatives and market performance. Toward the end of the meeting, the team also decides to make an adjustment to one of their rate configurations. Getting back to their desk, the revenue manager logs into the RMS to make the adjustment. Since a configuration update hasn't been made in quite a while, the revenue manager uses the system's performance support functionality to visually walk through the different steps of the task.
The revenue manager spends the remaining hours working on the strategic initiatives discussed in the early afternoon meeting. Custom reports and graphs detailed by market segment levels help identify several marketing opportunities and insights. The revenue manager also noticed that one of their competing hotels has been raising and lowering their Friday rate every single day, so a quick configuration change tells the system to ignore that particular hotel's rate changes for the date in question.
At the end of the day, the revenue manager shuts down their laptop for the day and heads home. Since the kids are off from school the next day, the revenue manager will be working remotely from their home office. And with the RMS being a cloud-based service, the system functionality remains the same from any location with internet access. Cooking dinner at home, the revenue manager sees a frantic text from the general manager. She wants to change their unqualified public rate for Friday. The revenue manager opens up their mobile app, makes the requested change and immediately pushes out the changed rate to all selling systems - wondering how revenue management life existed without the powers of technology.
One Day, Two Very Different Lives
It is clear to see that revenue managers working without the benefit of an automated revenue management system commonly find themselves handcuffed to manual data entry processes with higher risks of human error, meetings spent focused less on strategy and more on basic logistics, and relying on limited data insights to make pricing and strategy decisions. The benefits that today's revenue management technology brings to the life of the modern day revenue manager reaches well beyond a scope limited to the hotel work day. Recent evolutions in technology have positively improved on-the-job system learning frustrations and job demands that previously made a healthy work-life balance seem downright impossible at times. And as the industry continues its discussion on evolving revenue management approaches and technologies, let's not forget to mention the monumental evolution of revenue management's biggest champion: the life of the revenue manager.
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IDeaS, a SAS company, is the world's leading provider of revenue management software and services. With over 30 years of expertise, IDeaS delivers revenue science to more than 15,000 clients in 143 countries. Combining industry knowledge with innovative, data-analytics technology, IDeaS creates sophisticated yet simple ways to empower revenue leaders with precise, automated decisions they can trust. Results delivered. Revenue transformed. Discover greater profitability at ideas.com