Bringing a revenue manager into an organisation is one of the soundest decisions you can make as part of your commercial strategy.
You may have heard colleagues talk about the progress they have made since hiring one. First, though, it is important to understand that a revenue manager joins an organisation to change how it manages distribution and data. If you are hiring one simply because everyone else has one, it may be better not to. You need an open mind and a willingness to change if you want to get the most from the new role. Here are some of the changes your organisation may need to be ready for.
1. Moving to dynamic pricing
This is the main change. I considered leaving it off the list because it may seem obvious, but it is worth repeating. There is little point in hiring a revenue manager if you intend to keep the same static rate all year. Static rates may still have their place, but make sure you understand their advantages and drawbacks before relying on them.
2. Developing your PMS or investing in an RMS
This is essential. If you are unwilling to invest in either of these options, you may be better off keeping things as they are. A revenue manager is not a shaman who can throw bones on the floor and predict the future. Their forecasts depend on clear, reliable data. Your property management system (PMS) may already provide enough information, or the data may be converted into useful ratios in spreadsheets. In other cases, you may need to develop the PMS, for example by improving export formats or creating new reports.
If your PMS provider wants to help its hotels improve and the development will benefit a large share of its customers, the update should be free. That may not be the case, and you may have to pay for it. Still, the return you can get from your data is worth the investment.
3. Improving distribution
You may need to reduce the importance of long-standing tour operators or accounts, or even stop working with some of them. Personal relationships can no longer be the only reason to keep a partner: from now on, decisions should be based on measurable indicators. In many cases, you will also need to reduce the number of accounts you contract.
4. Using a channel manager
A channel manager is essential if your distribution is at all complex. It lets you update rates for all your distributors from one tool. The alternative is for your revenue manager to spend a large part of their time changing rates in each distributor’s extranet, instead of analysing data.
5. Investing in a rate shopper
Unless you want your revenue manager to keep logging in to Booking.com to check competitors’ prices, invest in a rate shopper. It will give you up-to-date information about the competition.
6. Investing in rate-parity monitoring
Keeping rate disparities under control requires reducing your contracted distribution, but it may also mean making test bookings through OTAs such as Muchoviaje, Destinia or TravelRepublic. This helps you identify which distributor is behind a disparity and obtain a booking that shows who made it.
Your revenue manager will need access to a payment card to make these bookings, and you may have to accept some cancellation fees charged by OTAs. The biggest disparities are often hidden behind prepaid or non-refundable booking conditions. If the distributor genuinely wants to continue working with you, however, they will usually refund the money without too much trouble.
7. Providing training and attending industry events
Revenue management is closely linked to technology. To keep your revenue manager up to date with the best tools and techniques, give them access to training. Attending events such as tourism trade fairs and conferences is also a good way to network and learn what is new. It can also provide useful context for commercial meetings.
I hope these seven points help clarify what to expect when looking for a revenue manager. There is no worse investment than hiring one without giving them the means to do the job.