REVENUE MANAGEMENT FOR BUSY EXECUTIVES-By: Neil Ramiscal

LET’S START WITH SOME NUMBERS

• 1.7 billion rooms available

• 1.1 billion of those rooms were sold

• Record setting $122bn in Rooms Rev

CAN THESE RECORDS BE BROKEN?

• You bet they can!

STRONG GROWTH YTD

WHICH STATES PRODUCE THE MOST ROOM REVENUE?

WHERE ELSE DID REVENUE COME FROM?

Highest: Cancellation fee due to Group Business cancellations

Lowest: telecommunications due to the fact that no one really picks up the phone anymore in a hotel room to a make phone call, other than to call for room service.

ADR GROWTH

2014 YEAR END REVPAR FORECAST

2015 YEAR END REVPAR FORECAST

SO WHAT DOES THIS MEAN?

• Profits will increase so it’s great time to be in the Hotel Industry.

SO WHAT SHOULD REVENUE MANAGERS AND EXECUTIVE LEADERS DO?

• Objective: Build the most productive relationship possible between Revenue Managers and Executive Leaders.

WHAT SHOULD EXECUTIVE LEADERS DO?

• State your expectations and share your point of view

1. Identify Alignment –See where your goals align with your RM in terms of what they are doing.

2. Discuss Divergence – Have blunt conversations on where there might be some misalignment.

3. Define Middle Ground – define success together.

• Simple, but we tend to overlook them.

WHAT SHOULD EXECUTIVE LEADERS DO?

• Ask your Revenue Managers 2 questions when presented with information:

1. What does this mean?

2. And what does the story tell?

• As busy Executives, this simple question will give you a better understanding of how in depth your Revenue Managers are translating their data into strategy and give you a good idea of what direction they are headed.

FUN ACTIVTY

• Revenue Managers and Executives should sit down with Finance and ask them to identify some of the time frames where the hotel was at its most profitable level. From that, find out what the yield strategies were that got the hotel to that profitable scenario. Find relationship that we might not expect between RevPAR Index. What did we do in our MIX during that time?

WHAT DO EXECUTIVES WANT TO SEE MORE FROM REVENUE MANAGERS?

1. What some Executives see from Revenue Managers

• Revenue Managers fear holding rates, while the market is showing improvements.

• Revenue Managers more focus on hitting 100% occ.

2. To fix this……..

• Encourage them to take risk!

“ Baseball Players get put in the Hall of Fame for hitting 34%.” – Kevin Doyle

WHAT EXECUTIVES WANT TO SEE/HEAR

• Being Challenged by their Revenue Managers

• Know what risks are out there instead of asking Executive Leaders

• Despite the titles, Executives want RM’s to be more vocal if they disagree on something so trust can be built.

• Best Idea wins! No matter the title, whoever has the best idea always wins.

BOTTOM LINE…

• Executive Leaders and Revenue Managers need to be BEST FRIENDS.