Glion alumnus Thibault Catala – a leading consultant and expert in revenue management – argues that while the basics of this discipline remain the same for hoteliers, there are new dynamics disrupting the traditional landscape.

Everyone in the hospitality industry will have heard the traditional principle of revenue management being “sell the right room, to the right customer, at the right price and at the right time”. And while these basic tenets persist, many things have changed since the practice was first applied by Marriott in the late 1980s.

1) The revenue management technology landscape is evolving very fast

The job of the revenue manager used to be very manual. Now, though, what used to require a few days of manual adjustments and data analysis, takes just a few minutes. New tools and greater automation are now helping revenue managers reach a new level in the discipline. The role is shifting from short term tactics (setting up rates and restrictions for example) to long term strategy.

Here are just some of the new technologies that were not available to hoteliers a few years ago:

  • Advanced Revenue Management Systems (RMS), which use sophisticated algorithms to determine rates for the next 365 days, by room types and optimized three to five times a day.
  • Business intelligence tools that are helping revenue managers benchmark their performance against their market, and which can reveal booking patterns and rates among competitors.
  • Cloud based Property Management Systems (PMS) allowing revenue managers to work remotely.
  • Rate shopping tools, plus many more instruments that are helping hospitality professionals unlock new insights and take more accurate decisions.

2) The new revenue manager is agile and a master of persuasion

The job of revenue manager has undoubtedly become more complex, requiring a new set of skills and expertise – many of them what we think of as “soft” skills.

With the digital tools and technologies taking care of the day to day tactics, revenue professionals are now being asked to focus on revenue strategy. This requires more advanced skills, such as being a “master of persuasion” when proposing new strategies to implement. While it is now crucial to support all recommendations with plenty of data, making sure everyone is on board and creating the right culture within the organization require interpersonal and leadership skills.

This is indeed the end of the revenue manager “geek” crunching numbers behind his or her computer. A good revenue manager should be in the field with their team, making sure every team member is on board and the revenue management culture is growing at every level of the organization.

Lastly, the most successful revenue managers are now the most agile. They are not afraid to try new approaches or new technologies, to see what works and what doesn’t and keep moving forward. In revenue management, we cannot afford to stay still. We need to take risks and lead the approach to innovation in the hotel.

3) Revenue management is a collaborative approach and can yield high returns if done right

Hotel companies have understood correctly the importance of revenue management, and that it shouldn’t be the sole responsibility of the revenue manager. Everyone at every level of the organization has a part to play in it. From kitchen chefs to general manager, or even asset managers and owners, everyone should understand what 21st century revenue management is about and how their participation can influence outcomes.

Revenue management through accurate forecasting, daily pricing adjustments, business mix optimization, inventory control and distribution optimization is having a direct impact on the hotel bottom line without any increase in expenses. This in turn means increased profits. Hotel owners and asset managers now understand understood this, and that’s why we are now seeing much greater focus on revenue management.

With all of this in mind, it is important that the role of revenue management can attract new talent. This is all our responsibility (hotel schools, consultants, hotel operators, managers, technology providers…) to make sure we all participate in the development of this booming area within the hospitality industry.

  • This article was first published by the Institute of Hospitality

About Thibault Catala:

Having graduated from Glion with a bachelor’s degree in Hospitality Management – specialized in revenue management and finance – Thibault worked as a revenue manager for various hotel groups in Paris, Lisbon and Singapore. Today he’s running his own specialized revenue management consultancy firm in London, Catala Consulting, where he combines his broad knowledge of the subject with a passion for his work.

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About the author

Glion Institute of Higher Education
Glion Institute of Higher Education is a private Swiss institution offering bachelor’s and master’s degrees in hospitality, luxury and event management to an international student body across three campuses in Switzerland and London, UK.
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