What is a hotel revenue manager?
A hotel revenue manager is the person in charge of leading pricing strategies in order to maximize a hotel’s profitability. They generate rate strategies that can be applied to a hotel’s sales and marketing efforts to better position the hotel for success. They must balance the pricing strategy to meet the commercial goals, so they often work with sales, marketing, and operations.
RMs must work with different stakeholders on a daily basis to understand and make the best strategic decisions possible using market research, critical thinking, and analysis to reach conclusions that will benefit the bottom line. They must practice yield management of the property’s availability and restrictions.
What is the role of a hotel revenue manager?
A RM is in charge of ensuring that strategic goals are met through a methodical approach to pricing. Using technology and big data, they strive to maximize revenues and yield. One of the most important tools they can rely on is a PMS for Revenue Managers which can help attract more guests and boost revenue in order to stay competitive through inventory optimization.
By closely monitoring and predicting market trends, they can respond accordingly to changes in demand. It is a very important role because it helps ensure that your structure reaches their bottom line, and this is why it’s also important that they rely on tools that will help them do their job better. They must use this knowledge to direct sales and marketing teams to position their campaigns and strategies to reach targeted goals.
6 most important revenue manager skills
There are many skills that you should look for when hiring a revenue manager at your property. Let’s take a look at some of the most important skills, which include leadership, the ability to be analytical, dynamic, tech-savvy, personable, curious and inquisitive.
1. Leadership
Leadership is an important skill when hiring a RM. They must be able to make decisions that will shape the future, so being confident and leading the way to success is critical. While it is important that they liaise with different departments to understand the interdependence of the hospitality ecosystem, it’s also key that they are willing to take a stance and lead the direction of the pricing strategy.
2. Analytical
Being analytical is another critical skill of a revenue manager. They must see how all the different factors at play in the market affect demand, and they must be able to create a robust pricing strategy that is informed by these different factors as well as big data. They will often spend time looking at dashboards with historical data, comparing rates with those of competitors, and statistics to leverage profitability, so they must do so in an analytical way.
3. Dynamic
A dynamic role requires a dynamic individual. The market is always changing, and that is why your RM must be quick on their feet to change strategies that aren’t working or to adapt to market trends. They must not be set in their ways or beliefs because otherwise it will be hard to adapt to such a role.
By looking at reports, they must be able to understand any changes in the market, the comp set or shortcomings of your structure, and make decisions accordingly. Their strategies should be dynamic to meet the changing, seasonal market.
Learn about the 12 most effective pricing strategies.
4. Tech-savvy
Technology is one of the most important toolkits of an RM, so this is why it’s important that they be tech-savvy. They must be able to use different tools such as a Property Management System, a channel manager in order to upload rates and availability to OTAs, any other third party systems, as well as other market intelligence tools in order to do their job well.
5. They must be personable
A RM must be a people’s person because they will be interfacing with different departments throughout the day to understand booking trends, new leads and strategic goals. They must meet regularly with different stakeholders to ensure that the pricing strategies and availability are on-par both with the goals of management and in comparison to the competitive set, and with the actual sales and figures.
They must work with marketing and sales to create campaigns that are aligned with the strategies that they lay out. Being a people’s person is crucial because they will meet regularly with marketing, sales and management to work together as a team to optimize processes and prices to reach revenue targets.
6. Curious and inquisitive
A revenue manager must be curious and inquisitive, while at the same time possess a hunger for knowledge. This means that they are on top of the latest industry trends, and are constantly monitoring the competition to see how well your structure is performing in relation to the competition.
They must be up-to-date with industry newsletters and events that will help to inform their revenue management strategies and keep your hotel ahead of the game. The more innovative and hungry for knowledge your RM is, the easier it will be to keep on top of the market, and make crucial decisions that will positively impact profitability.
Conclusion
The role of a revenue manager is critical to the success of a hotel. They must be able to understand the needs across departments, keeping an eye on the hotel’s competitive set, market demand, and events that might affect demand like national holidays to make smart and informed decisions about pricing. A comprehensive pricing strategy will help optimize revenue in periods of high demand so that a hotel can be profitable even in periods of low demand.
There are many important skills that one must have to be successful at this role, which we have looked at in more detail in this article. Revenue managers can be unequivocal leaders, so understanding what it takes to be a successful RM is key to making a good decision about who you bring in for this role.
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