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4 Tips for Effective Revenue Management

Revenue managers need to make it a priority to understand their audience and provide relevant, actionable information that they understand.

I recently facilitated a revenue-management workshop focused on effective communication. A workshop participant was chosen to present anything he wished; he opted for his weekly yield meeting presentation. It was highly detailed with a dazzling spreadsheet of a million numbers, dates and colors. While he was obviously knowledgeable about the content, it was lost on the audience as they concentrated on trying to read it and understand the context.

I challenged the presenter to focus only on actionable content and to present key takeaways. He was proud and insisted that his GM asked for this report to be presented chock full of detail and explained with minutiae.

Later that evening, at a welcome reception, the participant’s GM arrived and greeted me. After a round of small talk, he mentioned in a quiet aside: “Please, if you teach him anything, ask him not to present that report the way he does at the yield meeting. It’s too much ... ”

How often do we have a yield meeting with a grid of important numbers projected on a screen with only one or two participants involved in the conversation and nary a murmur from the rest of the team? How often do you present a forecast to the sales team and have them walk away only to quote a price over the very dates you’re sold out?

A survey of key characteristics of revenue managers was performed by Sheryl Kimes, professor of operations management in the School of Hotel Administration at Cornell University, in 2010. Her findings showed that revenue-management leaders are first and foremost looking for solid communication and leadership skills in revenue managers, after analytical skills and ahead of formal revenue-management training.

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So how can we improve our communications and get the rest of the hotel team engaged in revenue management? How do we plant the seed to get them to want to learn more?

1. Know your audience
The key to any effective presentation is to understand your audience and to provide what is relevant to each of them. This is not always easy. Revenue managers have a unique and valuable skill set: They’re able to gather data and metrics to understand the best direction of the hotel’s business to maximize revenue. However, translating this knowledge to diverse audiences, from hotel owners to housekeeping staff, is challenging.

If you’re facing this challenge, start by identifying the individuals who will attend your next meeting. Be clear in your own mind why your data is important to each of them. As you prepare your presentation, think about the jargon you use. If your audience isn’t familiar with the language of revenue management, work to ensure they understand key terms. You might want to provide your team with a glossary of terms to which they can refer. At the same time, learn about the jargon and terms your team members use in their work. Make the connection to what is meaningful to each of them.

For example, if you work with sales managers who are not making their pick-up data available in a timely manner, you could identify the impact that lacking data has on the hotel forecast. Or you could explain how this can impact the manager’s personal sales quota as well as the impact it has on the team quota. The latter, more personalized approach might be more effective.

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Answer the question, “What’s in it for me?” For instance, what does roomnight occupancy mean to your audience? The hotel is busy. So what? Each department is impacted differently. To make the meaning of roomnight occupancy clear, take your weekly forecast, whether presented in a meeting or distributed, and share:

  • arrivals and departures (for front office staffing);
  • total number of transient guests (for restaurant staffing and purchasing);
  • number of package or promotion guests (for amenity, room-service prepping, concierge reserving tickets or whatever the promotion includes if applicable); and
  • any potential sold out days (for engineering to postpone any scheduled maintenance).

Talk to each department and ask them how they may find your content in the meeting or report most valuable.
2. Unknown advocates
Tap into the knowledge and skills of others in your hotel who might be silent advocates for your cause.

The director of finance is typically knowledgeable, impartial and analytical and can help explain difficult calculations and their relevance to other departments. A public relations or marketing communications manager can help you with creative and effective delivery of a topic. A sales manager can provide guidance on how to sell a new idea, perhaps to your GM.

3. A presentation is not a report
Overwhelming an audience with a litany of numbers on a screen might confirm that the revenue manager is a geek but certainly not a leader. If all you are doing is regurgitating the information people can read anyway, you’re wasting their time—and yours. A colleague of mine calls this “Death by PowerPoint.”

Instead, send the relevant information in advance. If you have to send a huge report, summarize the important details or highlight areas for people to review so they are prepared for the meeting. This reduces surprises and keeps the meeting relevant and on track.

Rather than presenting a report like this:

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You could present this:

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You can still pass out the report in all its detail, but your presentation might highlight the information in a graphical format that is easier for an audience to discern. Add a circle around the area for discussion; this makes it easier for the individual to understand and answer, and easier for a diverse audience to absorb.

During your presentation, your colleagues can look at the report while you engage them in discussion. Bring up only the key action points relevant to each person attending. This keeps it focused, letting them know you’re valuing their time and giving them the key takeaways. If you have nothing actionable to share, then don’t call a meeting.

4. Use a glossary
Provide a glossary of revenue-management terms so your team members better understand what you’re presenting. It can be attached to any report as well as provided for a presentation. New attendees especially would find this very useful.

For example, a new director of sales asked why the data from STR, parent company of HotelNewsNowc.com, was reported at their hotel including their hotel in the competitive set. They were used to the report excluding the competitive set at another hotel. To answer the question and add more meaning to the data, the revenue manager distributed the glossary at the back of the STAR report and provided an explanation as to how to understand the reasoning behind the metrics. The revenue manager also referred the direct of sales to a link to online training that provides further guidance. While some may find this detail irrelevant, it can create efficiencies and comfort for new team members.

Conclusion
Tap into this practical, useful top 10 list of effective presentation skills that can be adopted for any meeting.

Successful leadership in revenue management requires you to break down math into clear metrics to persuade your audience of the value of the data. Make it a priority to understand your audience and provide relevant, actionable information that they understand. With that, your value and the value of revenue management will become more apparent across management, the understanding of revenue principles will increase along with team involvement and positive outcomes will be the norm.

Rhett Hirko, CRME graduated from Michigan State University in 1990 with a B.A. in Business and a major in Hotel and Restaurant Management. He has worked for Hyatt Hotels in revenue management for over 17 years; he designed and implemented the single image inventory reservations process for all Hyatt hotels in North America and was involved overseeing revenue management in a regional capacity for 7 years. In the last nine years, Rhett has been in Hyatt’s international division. He designed the CRS-RM interface and the RM training program and directs the RM process for all international hotels. Rhett recently transferred to Zurich, Switzerland heading revenue management for all Hyatt hotels in Europe, Africa, the Middle East and Southwest Asia. Rhett is a member of HSMAI’s Revenue Management Advisory Board.

About the HSMAI Revenue Management Advisory Board
The Revenue Management Advisory Board leverages insights, emerging trends, and industry innovations to guide the development of products and programs that optimize revenue for hotels.

Members include:
• Co-Chair: Jon Eliot, CRME, CHA, Vice President of Revenue Management, Premier Hospitality Management
• Co-Chair: Sloan Dean, CRME, Vice President of Sales & Marketing, Interstate Hotels & Resorts
• Immediate Past Chair: Scott Roby, CRME, Vice President, Revenue Management, Evolution Hospitality
• Chris K. Anderson, Ph.D., Professor, Cornell University
• Bonnie Buckhiester, President & CEO, Buckhiester Management USA Inc.
• Sheila Cosgrove, Director, Revenue Management Ops & Planning, Intercontinental Hotels Group
• Kathleen Cullen, CRME, Vice President Revenue Strategies, Heritage Hotels and Resorts
• Kent Duncan, CRME, Vice President, Sales & Revenue Strategy, Marcus Hotels & Resorts
• Tammy Farley, Principal, The Rainmaker Group
• Neal Fegan, CRME, Executive Director of Revenue Management, Fairmont Raffles Hotels International
• Rhett Hirko, CRME, Director of Revenue Analytics, Hyatt Hotels & Resorts International Operations
• Jay Hubbs, Vice President, Regional Sales, ReviewPro
• Burl Hutchison, CRME, Director of Revenue & System Optimization, Sabre Hospitality
• Klaus Kohlmayr, Senior Director, Consulting, IDeaS - A SAS Company
• Mark Molinari, CRME, Corporate Vice President of Revenue Management and Distribution, Las Vegas Sands
• Orly Ripmaster, CRME, Senior Associate, KSL Capital Partners
• Mark Robertson, Central Director Revenue Management, Wyndham Hotel Group
• Susan Spencer, Market Director - N. America, ChannelRUSH
• Trevor Stuart-Hill, CRME, President, Revenue Matters
• Paul Wood, CRME, CHBA, Vice President of Revenue Management, Greenwood Hospitality Group

Want to Learn More?
This topic will be addressed as part of the 10-part 2012 Revenue Management Webinar Series produced by the HSMAI University in partnership with HotelNewsNow and STR. Each month a webinar covers one aspect of cutting edge revenue management in today's economy in conjunction with articles written by members of the HSMAI Revenue Management Advisory Board. If you’re not able to attend a live program, archives are available.