THE HOTEL REVENUE MANAGER – Hotel Front Office
Hotel Revenue manager help maximize their property’s room revenue. The Hotel Revenue manager for a property is the person responsible for maximizing the room revenue on a daily, monthly and annual basis. Their actions directly affect how many rooms the hotel sells and at what rate. The person in this position has to understand their hotel, the market they are in, technology, and have a unique knowledge of economics.
A successful hotel revenue manager should possess most of the following skills:
- Operational Skills – He/She must understand sources of revenue and associated cost structures for each
operating department, and must be aware of the interdependencies among departments to meet hotel goals.
- Analytical Skills – He/She must understand historical, current and future revenue data. A Hotel Revenue manager must be able to evaluate hotel booking trends and to project occupancy demands when determining pricing strategies that ensure a balance between room rates and levels of occupancy.
- Strategic Skills – The Hotel Revenue manager must understand what is going on in the market and how market forces are likely to affect the hotel and then apply those assessments to take advantage of favorable market conditions.
- Organizing Skills – He/she must maintain detailed records of current operations in order to develop a database of information for future application.
- Communication Skills – A Hotel Revenue manager must be able to explain revenue processes and decisions with respect to short-term and long-term business projections.
- Good Listening Skills – The Hotel Revenue manager must be able to listen to revenue management team members, hotel department heads, and other staff. He/she needs to appreciate issues that others raise and suggestions they make.
- Team-Building Skills – Effective revenue management strategies and tactics depend on the Hotel Revenue manager’s ability to build and maintain trust and confidence in working relationships.
- Training Skills – Successful revenue management requires ongoing training of all those involved in the process. The Hotel Revenue manager must be able to train staff at all levels of the organization, including the general manager, the front office manager, sales managers, the food and beverage manager, the reservations manager, the banquet manager and others actively involved in the program.
- Setting rates: The primary function of a Hotel Revenue manager is to set the hotel rates for every night. This requires knowledge of market forces and economics. If the rates are set too high, then you will lose out on occupancy, if they are set too low, then you may sell out too quickly and lose out on potential higher revenue. The goal is to sell the last room at 11:59 pm on each particular day and to make sure the hotel gets the highest rate for each room.
- Forecasting: The Hotel Revenue manager must provide reports to the general manager and ownership that forecasts what the room revenue will be for some period. These reports are put together with historical information coupled with rooms that are ready reserved and the rate at which they were booked. It is vitally important that these reports are as accurate as possible as they will help other managers and owners make decisions about the rest of the business.
- Positioning: The Hotel Revenue manager should assist the sales and marketing departments with ideas on how to position a property. Since he is the most knowledgeable about slow periods that the hotel might be facing, the can provide the sales teams with ideas on how to get groups and individual travelers coming to the hotel. This insight can be the difference between a full hotel and an empty one.
- Market area: To know how the hotel should be priced, the Hotel Revenue manager needs to understand how the other hotels in the area are pricing themselves. She can do this in several ways. She can either blind call the hotels to try to get rates, or she can look online. Either way, once she has the knowledge of what the other hotels are doing, she can use it to better drive revenue to her own hotel. One tactic a Hotel Revenue manager might use is to sell an upgraded room at slightly higher than a competitor’s standard room rate to drive business to her hotel.
- Managing Reservations: Finally, some hotels require the Hotel Revenue manager to be the reservations department manager as well. This involves the hiring, training, disciplining and firing of a reservations sales staff. One one hand, this management can take away from the other revenue duties the Hotel Revenue manager has. On the other, it gives the Hotel Revenue manager access to a team of employees who can better enact his decisions regarding rates.