Revenue management revolution

Posted by: AUHDORM
30 Aug 2010
Great Article and thanks to Hotelier Middle East for taking the initiative to wake up some industry colleagues. Would like to add few thoughts that I found missing in there. Revenue Management is a culture that is full of art, technology, believes and exiting experiments. From the Owners of Hotel, Operators and to Driver who take guests from the Airport should get involve and believe in this process. Unfortunately, in today?s market, so called Revenue Manager is given a Job Description, but not involved more into decision making process of the business strategy. The process should get deeper into the P&L and see how we as an organization can develop our strategy to improve profitability. It is not only rooms, but also looking at the other important areas, such as manning, contracts, F&B etc. Further, Sales & Marketing is a vital area where Revenue Management Culture should be implemented. It is not all about discounting every time when a client declines a piece of business. Using appropriate skills to close a deal without opening a door to the client to shop around is very important skill for our Director of Sales and their teams. Launching promotions for the sake of doing it because your competitive set or few doing it will not drive business to your hotels. A deeper thinking is needed here to understand your products and services, its value, its Brand etc and match with the needs of market and clients. At the same time, I would like to take your memories to few years back when Dubai experienced the BOOM. In short run, "Make Money when the market helps you to make money - and suffer together when the market declines" might possibly be the best during those days. But look at today, 30+% decline in occupancy, 30+% decline in RevPAR and 20+% decline in GOPPAR.....is that because the inventory increases and demand drops? well, I don't really think so, If you analyze further, we need to look into passenger statistics and airline movements to Dubai as a city, has shown a tremendous growth and DTCM taking much greater initiatives at the same time. So, what went wrong? I would say that hoteliers were not looking at the long run and just made as much as they could by selling a Standard Room @ AED 3000 - 5000++ per night. Result that most of business clients declined Dubai been an expensive city, instead shifted business to different destinations. I strongly believe that Revenue Management Tactics should be driven with care and fair with greater understanding and developing this culture from very top to bottom and appropriate respect to the culture and ?CHANGE?.