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Three word sales pitches work better than a hundred

What are you doing to improve the training for revenue managers?

RD: We’re looking at a revenue academy for next year, including a half day for GMs because I also think the general managers need to know more about the important elements of revenue management.

Certainly there are some who know what they are talking about but there are others that don’t. We had it on the agenda for 2009, but given the other projects we had and cut backs and costs etc, we thought it would be better in the first quarter of 2010. So yes, there is a plan to get to a place where people are certified to our level for revenue management.

GB: From my side there are a couple of things. One is that we’re working in partnership with Cornell University, where we’re sponsoring the revenue management course.

We’re also working with the British Association of Hospitality Accountants and Oxford Brookes University, so the more it’s becoming a discipline, the more we’re going to get people coming into the industry with that foundation rather than those coming at it as a reservation manager who has been put in that position.

We’re also finding hotel groups are looking outside of the industry to bring revenue managers in, because they might have different experiences and might be the people able to analyse the data and take the risks rather than the people coming through the hotel ranks at the moment. It’s definitely different interests and different skill sets.

What skills does it take to be a good revenue manager?

RD: With revenue management you need to be more entrepreneurial, you need to be moving all the time, akin to the stock market, adjusting the price points based on length of stay; spotting a new demand as it materialises; identifying a new trend — whether it be up or down — and moving with it quickly. That’s the fun of it! Everything is moving and evolving constantly, and as a revenue manager you need to be able to react and above all capitalise on it.

I think it’s passion but it’s also risk-taking. In growing my career in revenue, I must have risked my neck so many times — I mean, literally, the whole thing on the line and I like living there, on the edge of good. Maybe one day I actually will get fired, but it hasn’t happened so far! I must have gotten close, telling the chairman of Hilton when he called me for a booking once, ‘if you’re telling me to take it, I have no choice as you’re the chairman, but if you’re asking me, my answer is over my dead body!’, and he said ‘No problem Rex’ and he hung up — but what a frightening fight that was.

That particular Tuesday night in the hotel, (they had owned it for about 10 or 11 years), but that particular Tuesday night turned out to be the highest Average Daily Rate (ADR) in the history of the building – the highest single day’s revenue in the history of the building. So they had no choice, the board had to write to me and say ‘congratulations’. But I was watching it for three months and it just shows you what you can do if you concentrate and go with your convictions.

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What would be your top three tips to hotels looking to transform their revenue management department?

RD: I think revenue management, as a concept or as a philosophy, operated within isolation within the hotel is a complete waste of time — you may as well go home. If revenue management isn’t a culture across the executive team at a hotel, then you haven’t got everyone on board to understand the power of it, what it can do and what it means. I think it has to be a collective management decision, and I think the biggest challenge to revenue management has always been built in isolation. It’s always one person, in one office at one desk so that would be one top tip — you have to be fully adopted! There is now talk of revenue management in food and beverage and in meetings, I mean it’s still a very un-talked about topic as we are really only talking about revenue management in most cases in terms of rooms. But there is an opportunity and it exists already, if you take the same ideas you can expand — that would be one tip.

The other is that you can do all the revenue management in the world, but if you don’t have integration between a revenue management system and your property management system (PMS), or reservations don’t know what or how to sell on a phone call with a customer, well then you’re lost again. It has to be that they know how to take the pricing output and then sell it appropriately because at the end of the day, the sales are still happening in most cases between two people. I’m hoping that will change over time but it has not changed yet. Some companies are reporting 40% electronic production but maybe, maybe not.

Finally, training! Don’t think the system will be like some magic wand! Wouldn’t that be great? If you just bought a revenue management system and just plugged it in? But it just doesn’t work that way. You’ve got to work at it and you’ve got to keep advancing and I think IDeaS generally is.

GB: Honestly, I think my three top tips would simply be education, culture and training.