Investments
So, where would investment be best placed if you’re new to the revenue management game? While an RMS is of great importance, it cannot work if it doesn’t have a well-trained, knowledgeable revenue manager controlling it.
“Automated systems are a valuable and necessary tool for revenue managers to understand demand and activate inventory and distribution strategies,” says Alexander Lee, group director of revenue management and distribution at Jumeirah Group.
“For large and complex properties we have in the Jumeirah portfolio we require leaders who are able to proactively make decisions that will enhance revenue and grow market share.”
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Lee also says that when looking for a revenue manager, his pre-requisites have evolved over the past few years, in line with the development of the sector itself.
“Revenue managers now need to lead revenue management strategy as well as be savvy channel management experts. The volume – and value – of demand being generated via brand, as well as third-party, electronic channels continues to grow exponentially and this requires them to proactively manage and manipulate, appropriate to each period’s yield strategies.”
Anita Markiewicz, Mövenpick Hotels and Resorts’ vice president revenue management – Middle East and Asia, agrees that the skills a revenue manager needs have developed over time, and says that it’s not always easy to find the right people.
“Recruitment is a challenge in delivering good revenue management, as the more technical and higher the expectations of the role, there seems to be fewer people with the right mix of technical expertise and people management to deliver the culture, communication and strategies, and there are so many new hotels all over the Middle East, Africa and Asia.”
Carlson Rezidor Hotel Group’s director, revenue development Middle East, Cristina Polo, says that the training on revenue management should not be restricted to revenue managers.
“Training should extend to general managers, directors of sales and marketing and other key parts of the revenue process. The more everyone understands the more we can make smart decisions in our everyday work.”
“There are hotel companies in the Middle East who are leading the way for the attitude shift – holding regular conferences where revenue managers meet each other and share their data and best practice,” says Specht.
“Certain actions and communities have been put in place by the industry itself, but perhaps more needs to be done in terms of educating the market on the meaning and the value of revenue management.”
Difficulties
Even with all of the training in the world, the Middle East is currently posing a unique problem within the sector.
While other regions have past data and forecasts depending on upcoming events and demand, this region’s troubles over the past year and a half were unprecedented and threw up an on-going curveball to revenue managers.
“Forecasting has been an issue this last 18 months due to the Arab Spring,” says Polo. “But the countries that weren’t touched by the Arab Spring (Dubai etc.) kept their market penetration and held fast to their rates.”
The Arab Spring and sudden drops in tourism to certain parts of the region have in some cases resulted in hotels dropping rates last-minute.
But Mövenpick’s Markiewicz warns against this move: “This simply dilutes business, drops the marker rate and teaches the client to wait, enhancing late pickup.”
For Jumeirah, there has been a change in the traditional reliable markets in the region, which has pushed it to develop its strategies.
“For our resort properties the dependence on qualified market segments continues to decline and therefore enhances the need to maintain and proactively manage dynamic demand and the related pricing strategies,” says Lee.
“This development brings us closer to some of the more mature European and US markets. This change also requires a cultural shift with the need to enhance the seniority and overall leadership skills of our revenue management talent.”
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