- Appoint a Revenue Leader. This is by far the most difficult and crucial part. You need an intelligent, experienced, and ambitious revenue manager who’s up for the challenge of not only building out the revenue management processes but also the culture of the company.
- Portfolio size > 10 hotels. If your portfolio hasn’t hit this mark yet, you probably don’t have the infrastructure yet to build out a successful team and you won’t be saving money. Continue to outsource your revenue management until you hit this point.
- Technology. DO NOT hire Coordinators and Analysts to build excel reports for you. It’s a waste of time and money, and the reporting will not be sufficient to revenue manage efficiently and effectively. I started revenue managing 5 Kriya Hotels from Excel spreadsheets, really good spreadsheets. I was splitting my time 50/50 between revenue managing and building reports. Macros would break and the database didn’t have all the data I needed. I’m not an excel hater. I think it’s an incredible tool to do adhoc analysis and it’s much faster to update a spreadsheet than to update software, but you can’t scale a revenue management department with it. Now (shameless plug warning), Kriya RevGEN automates reservation-level data for all brands in a clean cloud-based user interface that can also be accessed directly from your inbox daily. It’s taken us 5 years to develop, a lot of money, a lot of sweat, and there’s still a lot of work to be done., but man, it makes revenue management easier, smarter, and better 😉.
- Understanding the BRANDS. OMG this is the biggest headache on this list. There are countless certifications and training you’ll have to complete and systems to navigate. We’ve spent the last 5 years building an online portal with all of the brand idiosyncrasies for negotiated rate builds, brand.com updates, SRP modifications, proper yielding, promotions, overbooking, changing rates etc. You’ll need to build out your own knowledge base over time, and you’ll want to appoint brand champions to keep your entire team up to date on what they need to know. One big pro is that your team will be better revenue managers overall by leveraging all of the brands’ best practices and having the intel into how your competitive set operates their rates, promotions, etc.
- Recruiting and retaining talent. Revenue managers are in high demand. We typically hire really smart analysts from top schools and train them up slowly. You can teach revenue management but you can’t teach the analytical mindset and confidence needed to be an effective revenue manager. You can hire seasoned revenue managers and there will be less of a learning curve, but you may encounter bad habits that require retraining. You also have to be ready for turnover, something you don’t need to worry about when outsourcing. What happens when your revenue manager quits? You have to revenue manage 10 properties until you find a replacement. I’ve been there and it’s not fun. It’ll take you away from leading and thinking strategically. Shameless plug #2 – You can use Kriya RevGEN as taskforce or overflow RM as well so you can sleep at night.
Although it may not seem like it, this blog is meant to encourage you to bring your revenue management in house and take control. I just want to highlight the challenges and prepare you for what’s to come. Please feel free to reach out if you want to discuss this topic further. I’d love to connect!
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