When you get the opportunity to work as a revenue manager
You usually arrive with the manual well learned. After several job interviews, you may have looked at a blog such as Andre Sturi’s to brush up on concepts like “booking curve”, “TRevPAR” or “unconstrained demand” and impress your interviewers.
The trouble starts when you sit down at the computer and cannot make sense of the data. You ask, hesitantly and out loud: “Does anyone pull occupancy more than three months out every day?” People look at you and say: “What?” Then you start to worry a little. In a couple of days your new manager may ask whether you have prepared something on the booking curve—and tell you to prepare RevPAR instead of TRevPAR.
The important thing is not to panic. Start exploring the PMS to see what information you can get. You will probably find a report that can be exported to CSV or Excel with past and future occupancy. Within a year, you can compare occupancy with the same point last year several months ahead and begin doing a little forecasting.
If you are consistent (an essential quality for a revenue manager), you will pull that same spreadsheet every day and calculate daily pick-up. A simple subtraction tells you how many bookings or cancellations you have compared with the previous day. In about a week you will have weekly pick-up, and in a month, monthly pick-up. You can breathe a little.
Keep digging through the PMS for data that helps solve the following equation: Room nights × average rate = revenue.
Bingo!
You have found future revenue, which is great because you now also have the average rate (revenue / room nights). But do not panic if the August average rate is €34.27: the reservations team may be entering the value the day before, during their review.
Warning!
“Don’t worry, my friend.” Once you explain why rates need to be entered, your reservations colleagues will start adding them. Sometimes people change the way they work when they understand why it matters.
With a bit of luck, once you connect the main channels through the channel manager and activate booking delivery to the PMS, you will no longer have to monitor all of this manually. If you do not know how to set it up, call the channel manager’s support team as many times as you need.
You will need a rate shopper to monitor the competition, but in the meantime you can search Booking.com or Expedia. Once you have built up a meaningful history of bookings, entered correctly and on time in the PMS, look for an RMS to organise the information. That will be a significant step forward.
Do not go home discouraged after your first day. In one morning you may already have calculated pick-up, a forecast, average rate and revenue. You are beginning to build a revenue management culture in your organisation. After 365 days, you can compare occupancy, average rate, RevPAR and revenue—and start controlling the future and making decisions months in advance.
To finish, find ways to automate segmentation so it does not have to be changed manually for every booking. You could also have promotional codes from the channel manager downloaded into the booking record so your reservations colleagues can identify them quickly. And above all, keep thinking.