Industry Update
Opinion Article21 October 2019

Think Like A Revenue Manager

Five Sales Manager Tips to Up Your Group Business for Profitability

By Kristi White, VP, Product Management at the Knowland Group

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Knowland recently conducted a survey of over 900 hospitality professionals. While the survey covered a multitude of questions, 58% of individuals directly responsible for selling reported they were on or ahead of pace to meet their year-end goals. By contrast, only 30.3% of General Managers and Revenue Managers answered the same. This discrepancy shows a clear gap in perspective between the sales organization and their counterparts in revenue management.

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This is concerning because these two teams have traditionally had an adversarial relationship, with one team blaming the other for not making personal goals (Sales) and the other team blaming their counterparts for always wanting a "cheap" rate (Revenue Management). Honestly, there is truth to both sides of this coin. So how do you broker peace?

Chances are, as a sales person, you are never going to convince your revenue manager to give in to all of your requests and concessions. Remember, they are not looking at group goals, but rather what is going to bring the most revenue to the hotel as a whole.

However, there are ways to bridge the gap and truly set up your group business for profitability. Here are five tips to help sales managers better engage with revenue managers to create a win-win:

  1. Stop looking at each piece of business as a one-off
    If you're heavily relying on inbound leads, you are most likely bringing groups to your Daily Business Review (DBR) through the narrow lens of the "business of the moment." This doesn't help your revenue manager understand the value of the business. So, their decision will be solely related to the matter at hand, which means the needs of your piece of business will be evaluated against the revenue potential of the hotel via other means. Does your single piece of business stand-up in that scenario?
  2. Take time to understand the overall value of every piece of business
    With the right tool, you can research groups and understand its overall volume, what type of hotels they prefer, even their preferred destinations. All of this information better informs your revenue manager, allowing them to make better decisions. It is highly likely they will be able to help you with pricing if they know your "one-time" piece of business has the potential to visit 8-10 times per year.
  3. Understand your business mix
    While you might have individual sales goals, your revenue manager is responsible for all hotel revenue. He or she has a good understanding of the demand for the whole hotel, typically by day and season. Their job is to balance all of the demand to drive the most revenue for your hotel. If your group will drive significant ancillary revenue, make sure your revenue manager understands that. However, you also need to know food and beverage revenue doesn't come with the same margins as room revenue. Your revenue manager does and will factor that into the analysis of your piece of business.
  4. Determine if your group has flexibility
    This may seem like an unnecessary thing, but how often do you actually go into the DBR with this information? Having this information at the start will speed up the process and will give you more information to go back to the customer with. Being proactive at this level will put you ahead of competitors and might help you land the business.
  5. Advocate for your piece of business
    Back up your conversations with data to help your revenue manager better understand how your piece of business will help your hotel, not just in this one instance, but over the long haul as well. By doing this, you become your own advocate within your hotel and your customer's best advocate as well. It's the perfect recipe to win raving fans both internally and externally.

The relationship between sales and revenue management will always be slightly adversarial. However, if the two teams can understand what they each value in their decisions, together they can better support one another and achieve the overarching goals of the hotel, making everybody a winner.

For more insight, register now for our upcoming webcast on Thursday, October 24 at 1PM ET: Think Like A Revenue Manager to Transform Your Group Business for Profitability.

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Kristi White

As a hospitality veteran by trade, with two decades of experience in the hotel and revenue management side of the industry, Kristi has a pulse on the needs of hospitality group business. She has advised hundreds of hotels worldwide on improving their business strategy, hotel performance, and overall profitability.

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    About KnowlandAt Knowland, we are changing how group business is sold. We empower our hospitality customers to create sustainable, repeatable, direct group business. With the industry's largest database of actualized events, we harness the power of actionable intelligence so our customers gain control of pipeline development, build a stronger base of repeatable group business and optimize profitability. That's the Knowland Advantage. See why thousands of customers trust Knowland to sell smarter and maximize their revenue. Knowland operates globally and is headquartered in Rosslyn, VA. To learn more, please visit www.knowland.com or call 202-312-5880.

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