The industry has realised that revenue management involves far more than understanding graphs and spreadsheets. The industry has realised that revenue management involves far more than understanding graphs and spreadsheets.

The Human Touch

Behind all technology is a good manager. Technological solutions are simply tools, powerful though they may be, to inform the decision making process of a dedicated and accountable revenue manager. Their business acumen and ability to drive proactive change throughout the organisation is integral to the success of any strategy.

Testament to this idea is the revenue management strategy of City Seasons Group, where revenue mangers are positioned “on the ground” in individual properties in order to foster better understanding of the discipline within the organisation and facilitate the overarching strategy of the group.

“I believe that our revenue managers must be as close to the market as possible because dependable market knowledge is now more essential than ever before,” explains City Seasons Group managing director, Thomas Tapken. “They must be aware of shifts in booking patterns and fully understand the competition on a daily basis.”

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“But it’s also about educating the wider team and getting everybody actively involved in revenue management practices. Sales, marketing, communications and the rooms division manager all need to work together to create targeted measurable campaigns which are appropriate to the business needs of the particular hotel. In truth, we are still some way off the ideal scenario, but we will get there in time.”

The need for talented managers behind the technology and good corporate awareness of the discipline has not escaped the attention of the solution providers. Most package consultancy and training services into their software products to avoid hotels investing in a one-time system implementation with the unfounded expectation that nothing further will be required.

“I believe that it is important to focus on people and behaviours first, followed by the underlying processes,” explains Total Revenue Solutions director Jennifer Keen. “My number one piece of advice is always to foster engagement from your team from the very beginning, otherwise you could be in for a very long and uphill battle!

“It is critical that the revenue management team can drive action, not just analysis, and have the ability to turn data into recommendations. Also, the revenue management strategy needs to be given time — it needs to be a long-term strategy supported by short-term tactics. It would be hard to achieve all of this without an engaged and motivated team.”

A Profitable Future

The emergence of revenue management in the Middle East has been well-timed. The discipline has triumphed as the right solution able to respond to recent changes in the industry. At a time when hoteliers need to maximise their revenues and improve their efficiency, revenue management is able to deliver concrete results.

Momentum is likely to continue as revenue management firmly roots itself in the region’s business culture and, as the discipline is adopted into other departments, hoteliers will continue to see some impressive results in the long-term.
“Traditionally, revenue management has focused on rooms because they generate the majority of a hotel’s revenue,” explains Ròya International’s Saleem. “In most cases, there has been relatively little focus on other areas of the hotel business, including areas such as banqueting, restaurants, spas and health clubs.

“But, these areas are very interdependent because success in one area can increase demand in another. It is therefore essential to apply revenue management techniques to all of these revenue generating areas in order to maximise the potential revenue in the long-term.”

The revenue management revolution has only just begun and its full capability is yet to be realised. As the discipline creeps into other hotel departments, it will gain momentum and likely establish itself as a fundamental business standard. If hoteliers can “stick to their guns” and adhere to their yield management strategies in the long-term, then the required cultural changes and inter-departmental buy-in will follow.

“The most important thing is to see it through” says Jumeirah’s Wolf. “Once a strategy has been identified, agreed and implemented, there might be initial adverse market reactions, but if it is the right strategy for your hotel, and if it has buy-in from all the relevant stakeholders, then the results of this strategy will eventually speak for themselves.”