fiu revenue-management-2020-final
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Visionary Leaders Forum
Singapore October 24, 2013
REVENUE MANAGEMENT 2020
TALENT, TOOLS & TECHNOLOGY
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
1 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
Few industries are so heavily reliant on the delicate blend of top-notch talent, state of the art
technology and responsiveness to sometimes fickle consumer trends as is the hospitality and
tourism industry. Change is constant and the pace at which it occurs is accelerating
exponentially. To assist industry professionals in keeping pace with this rapid industry evolution,
the Institute for Hospitality and Tourism Education and Research (IHTER), a division of the
Chaplin School of Hospitality and Tourism Management at Florida International University
(FIU) launched the Visionary Leaders Forum. Held in Singapore on October 24, 2013, this
invitation-only inaugural forum provided a platform for intellectual 'peer to peer' exchange,
professional networking and collaboration. At the forum, an impressive array of senior
hospitality leaders gathered to speak candidly about the difficulties of staying current,
competitive and profitable in today’s challenging lodging and tourism industry arena –
particularly with respect to revenue management.
In a similar fashion to what is occurring in the United States and Europe, hotel revenue
management concepts and practices in Asia Pacific are rapidly evolving. The discipline of
revenue management is in transition from a ‘rooms-only’ approach used to maximize revenue
from overnight guest room operations, to an integrated approach which considers all aspects of
the hotel asset (physical, technological, management), that can be leveraged to drive optimal
revenue and profit performance.
Following on from IHTER’s successful annual Revenue Management 2020 – Talent, Tools &
Technology seminar in Miami inaugurated in May 2013, the Visionary Leaders Forum separated
the group of 18 executives into three investigative groups. Each group was tasked with exploring
one of the three assigned topics while guided by a moderator:
• Topic 1: Revenue Management Leadership & Talent, moderated by Mike Hampton,
Dean - Chaplin School of Hospitality and Tourism Management at Florida International
University
• Topic 2: Optimizing Profits with Total Revenue Management, moderated by Grahame
Tate, Managing Director, Asia Pacific – IDeaS, A SAS Company
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
2 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
• Topic 3: Revenue Management in the Digital Age, moderated by Patrick Andres, Vice
President & Regional Managing Director, Asia Pacific – Travelport
Key issues and findings of the group’s investigative discussions are presented in the following
paragraphs.
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
3 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
Revenue Management Leadership & Talent
That statement shared by one of the executives at FIU’s
Visionary Leaders Forum in Singapore, embodies the evolution
that the discipline of revenue management has undergone over
the past several years. From what had been a relatively traditional
‘inventory management’ job scope, today’s revenue management
professional faces new opportunities and challenges in a position that requires one to be far more
analytical, strategic in approach, and technology-savvy. Today’s revenue manager has a much
more visible role in the fundamental viability of the hotel operation, in many cases functioning as
the virtual cornerstone of the effort to drive results and optimize profits. That type of
responsibility can create enormous pressure on those holding the revenue manager’s position.
The group of professionals delving into this topic, with Dean Hampton at the helm, engaged in
lively discussion regarding the challenge that hotel operators and owners face in being able to
attract and retain talent with appropriate skills. Key points brought to the fore during the
discussions are outlined in the paragraphs that follow.
The group identified, as the fundamental skills of the revenue manager today, the ability to
facilitate communication among stakeholders and to influence decisions based upon the research
and analysis which is the foundation of the revenue manager’s work. These skills were identified
as being particularly necessary when managing upward.
The group acknowledged that, while most revenue managers are able to successfully capture
critical data to drive decisions, the ability of the revenue manager to translate and process
complex information and to funnel it to the appropriate management levels in a clear, concise
and effective manner is very often a daunting challenge. Keeping in mind that key decision-
makers within management and ownership might have backgrounds in areas of operations, such
as Food and Beverage, which have traditionally not been in the revenue management loop as
well as the fact that, frequently in the case of ownership, stakeholders have no hospitality
operations background at all, working with these individuals can be trying – demanding patience
“When I started, my title was that of Space
Controller.”
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
4 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
and the ability to explain clearly at a level that is understood by all. Functioning effectively in
this situation requires confidence and effective communication and group leadership skills. Many
of today’s revenue managers are relatively young and, as a result, somewhat intimidated by the
prospect of influencing and, in some cases, directing the actions of more senior management
team members.
There was strong group consensus on the following:
• Talent acquisition and retention in the world of revenue management is a global
challenge, one that is also impacted by both national and organizational culture. In Asia
for example, one might find that the ability of revenue managers to persuade senior
management and influence superiors may be inhibited by the presence of traditional
Chinese cultural norms.
• On a much broader basis, crossing international lines, there is often a gap between
‘legacy thinking’ – revenue management focused solely on Rooms division revenue
generation and that of the revenue manager who is incorporating Total Revenue
Management (TRM).
• Overly ‘traditional’ management that may lack full appreciation of the fact that revenue
management culture must be woven through the fabric of the entire operation
• Traditional management, with many years of hands-on industry experience, may not have
full appreciation of the need for a new revenue manager to be more strategic in price
optimization and, to do so, requires full access to evolving technology surrounding
distribution and customer experiences.
• The communication breakdown is a two-way street. The group acknowledged that many
young revenue managers seem to lack an appreciation of the fact that the hospitality
industry remains an industry in which service excellence distinguishes hotels and brands
and that evolving technology cannot replace the fundamental importance of the human
factor and meeting guests’ needs.
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
5 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
The group recognized, at the outset, the need for the revenue manager to be strategic and
analytical in terms of managing and analyzing data. At the same time, and as discussed earlier,
the discussion centered around the fact that talented young revenue managers often lack an
understanding of the operational aspects of a hotel. While the revenue managers are obligated to
consider soft or qualitative data
like customer profile and buying
patterns of the guest for
decision making, which can be
subjective and difficult to
measure and express in key
figures, there is greater need for these managers to integrate hard data with the hands on
operation of the hotel property. In short, technology should be revered for its ability to enhance
the revenue management process, but not so revered that it negates the need to understand the
basics of the hospitality industry in terms of process and goals to provide service and drive
customer loyalty.
Opportunities for students and those just beginning their careers in hospitality and tourism
management abound. However, the group discussion focused on the lack of a clear career path or
career potential for those entering the revenue management discipline. In this light, the group
discussed the fundamental topic of “what attributes make for a great revenue manager?” Some
offered that there is a need to focus career potential on ‘passion’ for the business and that career
progression needs to be well-rounded within the hotel and throughout operations, particularly as
it relates to TRM. Another point highlighted the fact that several hotels use the retail sector as
recruitment ground to source new revenue management team members given that industry’s
focus on consumer behavior.
In closing the session, Dean Hampton gently reminded the group that, in the case of university
graduates entering the world of hospitality management, young professionals should be able to
focus on a revenue management career without losing sight of the fact that they should “shoot for
the top” realizing that anyone has the potential to progress through their career to the point of
achieving a top CEO position.
“We need a process to merge and manage all the hard data without losing sight of the qualitative aspects of soft data for
decision making”
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
6 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
Optimizing Profits with Total Revenue Management
Compared to the US and Europe, hotels in Asia are typically larger full-service hotels with large
public spaces including food and beverage outlets, meeting and banquet areas, recreational areas,
etc. In Singapore, where hotel development costs are very high placing great pressure on the
financial feasibility of hotel developments, a TRM approach is the one option that hotel and asset
owners have used in order to see greater improvements in their return on investment and profits.
This group agreed that it was crucial to identify precisely what is meant by TRM: Total Revenue
Management (TRM) is about finding the most profitable mix of business for the entire hotel
asset and measuring total guest spend and profitability per market segment, thereby enabling
hotels to discover and maximize profitability across the entire property, not just via the rooms
operation. With TRM, the aim is to optimize all available revenue streams, including conference
and meeting space, food & beverage, retail outlets, spa and other ancillary services.
This group of leaders, moderated by Grahame Tate, Managing Director, Asia Pacific for IDeaS,
A SAS Company, explored how TRM is used to enable optimization of profits from meetings
and events business. They took the approach of looking at the subject matter as it relates to
strategy, process and people.
Strategy & Process
The group acknowledged the
opportunity for the role of a
hotel’s revenue manager to
evolve into that of an asset
manager, providing greater
leverage to hotel operators and owners. The discussion centered on trends in mixed-use
development and the various life cycles of a hotel property. It was noted that, as the revenue
management discipline evolves, it needs to be woven into the fabric of not only the operating
hotel, but into the very design of the hotel. Thinking about revenue maximization should begin at
the genesis of the hotel development itself.
“While revenue management performance benchmarks and best practices exist for guest rooms, there is no recognized
industry best practice for TRM”
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
7 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
A comment was made to the fact that mixed use developments in particular present enormous
opportunity to maximize revenues and profits, and that different stages of a hotel’s life cycle may
dictate a different approach and focus on the various components of TRM.
The group entered into a robust discussion focused on industry best practices and benchmarks for
total revenue management. What is the right measurement to analyze the success of TRM for
mixed-use properties, keeping in mind the different market segments and business mix? What is
the right measurement given a property’s life cycle – new versus mature product? The questions
remained unanswered within the group. There was a call for more research to support the
industry in terms of such standards and best practices. The leaders also want to see further
integration of revenue management into strategic planning at the early property development
stage, and for General Managers with focus on the big picture to be incentivized appropriately.
As hotels contemplate and deploy TRM initiatives to improve profitability, corporate and
business meetings & event companies are increasingly implementing ‘Strategic Meeting
Management’ programs to control costs and streamline their meeting and event processes. With
companies and planners becoming more strategic, data centric and process driven, there is
greater need for tighter integration of hotel management systems and closer collaboration
between hotel sales, marketing, distribution and the RM team than ever before.
Focus on People and Talent
In a discussion similar to that taking place at the Revenue Management Leadership & Talent
group, the executives in this group emphasized the need for graduates entering the industry to
have a TRM mindset, as well as the willingness and ability to become a commercial manager
(intended to mean someone with a broad scope of the business, beyond that of just room
revenue). This is something that will be critical to the success of any curriculum preparing
future revenue management leaders. Acknowledging the challenge that many may face in
reporting to traditional revenue management thinkers, the need for additional revenue
management training designed for General Managers and Department Heads was underscored
throughout the forum.
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
8 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
Revenue Management in the Digital Age
Moderated by Patrick Andres, Vice President & Regional Managing Director, Asia Pacific for
Travelport, this group of executives took on the topic of the evolution of hotel revenue
management in the digital age.
The changing landscape of the digital world has had a tremendous impact on the travel and
hospitality industry. From ‘Boomers to Bloggers’, widespread use of the Internet has created a
number of market conditions that are ‘game-changers’, presenting both opportunities and
challenges for hotels trying to stay current, competitive and profitable. Growing trends driving
these game-changing conditions and events include search, social, mobile and channel
convergence.
Because social media has put so much power into the hands of the consumer, this group
immediately focused on “the customer” – the hotel guest. The consensus among the group was
that, with all the heavy use of technology, we cannot lose sight of the fact that the customer is the
reason for the existence of the hospitality industry.
One of the problems facing the industry, in the mindsets of the participants of this group is that
some revenue management systems are designed around sometimes irrelevant or nonsensical
customer segmentation. The group stressed that guests’ expectations need to be addressed at an
individual level and we need to be careful not to indiscriminately put guests into “buckets” for
the sake of convenience and ease of analysis. Even at the General Manager and Department
Heads level, the group was of the opinion that there sometimes is a lack of understanding and
appreciation of customer needs that is fundamental in the revenue management function. Such an
understanding and appreciation goes well beyond managing data, it is essential for revenue
managers to understand the nuances of customer segmentation and how to price in response to
these nuances. An example would be the need for revenue managers to have a full appreciation
that the frequently returning guest needs to be given special consideration – not just treated as an
element of a “market segment”.
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
9 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
Armed with a smartphone and other mobile devices, consumers are becoming more and more
sophisticated. They want to be able to get current and accurate information on demand and on
the go wherever they are. One executive noted that whereas revenue management meetings were
previously held once a week within her organization, today the revenue management team must
make pricing decisions on a daily
basis based on the frenetic pace
of changes in consumer
sentiment. Yet, with focus on the
guest, the group called for a shift, acknowledging that whereas meta-search is currently driven by
price comparison, making everything a commodity, there is a need for it to evolve into an
intuitive booking system to enable “fuzzy” search by budget, preference and experience.
No conversation about revenue management in the digital age is complete without discussion
centered on the impact of the online travel agency (OTA) on pricing. This group’s discussion
became even broader in scope in consideration of the number and complexity of the mix of
distribution channels within the hotel industry. A noted anomaly in China for example is that
whereas OTAs generate a significant number of bookings, the travel agent market is still strong.
In many cases it is in fact cheaper for consumers to buy from the travel agent than online.
“We should be pricing to the consumer, not the channel.”
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
10 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
Summary: Time to Recalibrate & Refocus
Despite the fact that each of the groups was tasked with exploring a different theme – either
talent, tools or technology, there were common threads that ran through the discussions.
1. Responsive And Meaningful Customer Segmentation: There is a significant need for
more meaningful customer segmentation, supported by tightly integrated hotel
management systems and business intelligence tools to allow hoteliers to see the big
picture, spot the opportunities, and be confident, fluid and more responsive to customers
as individuals with different needs and motivations.
2. The Need for a Total Revenue Management Approach: Particularly in areas like Asia,
where stratospheric real estate development costs together with the rise in mixed-use
development projects, there was consensus that there will be an inevitable shift of focus
to a Total Revenue Management approach. However, participants agreed that the industry
is lacking in sufficient performance benchmarks and best practices to move us forward
and that more work needs to be done to make TRM effective.
3. New Set of Performance Metrics: Revenue management in the Digital and TRM age
requires a new set of performance metrics. Tracking revenue per available room
(RevPAR) and revenue share of the market (RGI -Revenue Generation Index) is no
longer sufficient and should be replaced and enhanced with new key performance indices
(KPIs) that consider multiple revenue streams and all associated costs of distribution by
channel. Only then can we make informed and responsive decisions on the type of
business to accept in order to maximize profitability (not just revenue) across the entire
asset.
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
11 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
4. Redefined Role for the Revenue Management Professional: Operators and owners
should engage revenue management professionals and asset managers at an earlier stage
in the hotel's technical design and development and maintain their reliance on such
individuals throughout the life cycle of the hotel asset. The "if you build it - they will
come" ideal does not work in today’s challenging development and operating
environment.
5. A Commercial Mindset: The new revenue manager must be a strategist: understanding
consumer behavior, analytics and Total Revenue Management. Develop future hospitality
leaders with a holistic and commercial mindset (one with a broad business scope beyond
just rooms revenue) to optimize the total asset, while at the same time provide
professional education to senior management to prevent unintended 'traditional and
legacy thinking' from stifling growth and long-term career progression of younger
professionals.
Conclusion
Rising above and beyond the individual comments made by the group of leading hospitality
professionals at the Visionary Leaders Forum held in Singapore, there was a palpable sense of
urgency. This sense of urgency reflected the group consensus that the integration of Revenue
Management in the hospitality industry has already changed the way we do business and that this
new business model must continue to grow and be nurtured if the hospitality industry is to keep
pace with other businesses competing for a finite amount of investor capital in the modern
business world. Fundamental to this growth and nurturing process is recognition that Revenue
Management – and key individuals performing the Revenue Management function -- must be
elevated in the mind of industry leaders so that it is recognized for what it is – indispensable to
the future success of the industry – not just a brick in the structure of the hospitality industry, but
the new cornerstone.
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
12 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
Attendees
- Patrick Andres, Vice President & Regional Managing Director, Asia Pacific – Travelport
- Anna Au-Yeung, Head of Partner Marketing, Asia Pacific – Travelport
- Fabian Bartnick, Senior Consultant, Asia Pacific – IDeaS a SAS Company
- Simone Champagnie, Executive Director - Institute for Hospitality and Tourism
Education and Research at FIU
- Bernadette Dennis, Director - BD Concepts/Managing Director – HSMAI Asia Pacific
- Craig Fong, Founder & Director – CF Ventures Pte Ltd
- Siv Forlie, Vice President - Revenue Management - Shangri-La International Hotels
- Mike Hampton, Dean - Chaplin School of Hospitality and Tourism Management at
Florida International University
- Jeannette Ho, Vice President, Revenue Management & Analytics, FRHI Hotels &
Resorts
- Puneet Mahindroo, Director, Revenue Management, Asia Pacific – Four Seasons Hotels
& Resorts
- Jurgen Ortelee, Vice President, Revenue Performance – Pan Pacific Hotels Group
- Shailesh Pallipuram, Director of Revenue Management – Operations and Pricing, Asia,
Middle East & Africa – InterContinental Hotels
- Jagdish Sandhu, Assistant Vice President, Revenue Management & Distribution – Silver
Needle Hospitality
- Philip Schaetz, Senior Vice President, Sales & Marketing – Dorsett Hospitality
International
- Christine Tan, Vice President, Sales, Asia Pacific – Trust International
- Grahame Tate, Managing Director, Asia Pacific – IDeaS a SAS Company
- Maria Taylor, Regional Vice President, Revenue – Meritus Hotels & Resorts
- Maunik Thacker, Senior Vice President, Marketing – Marina Bay Sands
- Christine Toguchi, Managing Director – MacroVision Network Pte Ltd.
- Richard Wiegmann, Chief Operating Officer – Trust International
- Stefan Wolf, Senior Vice President, Revenue & Distribution Strategy – Onyx Hospitality
Group
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
13 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
14 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
Our Presenting Partners
Thank you to our partners without whom FIU’s inaugural Visionary Leaders Forum could not
have taken place.
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
15 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
Authors
Gregory T. Bohan ISHC, BS Cornell University, MS Florida International University Visiting Assistant Professor Chaplin School of Hospitality & Tourism Management Florida International University
Gregory T. Bohan is lead instructor for graduate level Feasibility and undergraduate level
Revenue Management and Operational Control classes at the Chaplin School of Hospitality &
Tourism Management. Prior to joining the full-time faculty, Mr. Bohan had more than 35 years
of hands-on hospitality industry experience including directing consulting practices for PKF and
Pinnacle Advisory Group and as developer/owner/operator of his own full service country inn.
Simone Champagnie Executive Director, Institute for Hospitality and Tourism Education and Research (IHTER) Chaplin School of Hospitality & Tourism Management Florida International University
Simone Champagnie joined FIU in 2012 after serving over three years as Director of Alumni
Relations at Broward College and spending over 10 years in the international travel and tourism
sector. In her role at the Institute, Ms. Champagnie directs all business enterprise activities for
the Chaplin School of Hospitality & Tourism Management.
Christine Toguchi Managing Director MacroVision Network Pte Ltd Project Consultant for IHTER at Florida International University
Christine Toguchi is the Managing Director at MacroVision Network, a
management and training consultancy company that specializes in Customer Relationship
Management, Loyalty, Multi-Channel Distribution, Revenue Optimization and Sales &
Marketing. She was the founding Managing Director at the Hospitality Sales & Marketing
Association International, Asia Pacific Chapter and is currently Director at Large.
Institute for Hospitality & Tourism Education & Research A division of Chaplin School of Hospitality and Tourism Management, Florida International University
16 REVENUE MANAGEMENT 2020 TALENT, TOOLS & TECHNOLOGY
About the Chaplin School of Hospitality & Tourism Management
Florida International University's Chaplin School of Hospitality & Tourism Management has
been distinguished as one of the top hospitality programs in the U.S.. More than 2,000
undergraduate and graduate students from across the United States and around the world choose
FIU for its outstanding reputation, advantageous campus locations, expert faculty, rich
curriculum, and fast-track career opportunities in the international hotel, foodservice and tourism
industries. In August 2006 FIU unveiled the first US School of Hospitality and Tourism in
Tianjin, China. The Marriott Tianjin China Program is FIU’s largest international program, with
a capacity for up to 1,000 students. For more information about Florida International
University’s School of Hospitality and Tourism Management, visit http://hospitality.fiu.edu/.