More Than You Think
The best can raise RevPAR 3 to 7%. Use these tips to
spot top talent and improve your chain’s bottom line
October 4, 2006 - Hospitality’s quest for every spare dollar available makes the corporate revenue manager one of the highest profile jobs in the industry today. An effective revenue manager using the right tools can raise a chain’s average daily rate (ADR) as much as seven percent – most of which goes straight to the bottom line. With this kind of money at stake, operators can achieve significant benefit from identifying the best, brightest talent, as well as understanding what they need to achieve optimum results.
The job description and responsibilities for the corporate revenue manager vary from chain to chain, but regardless of the hotel company, nearly all revenue managers perform multifunctional roles that extend far beyond optimizing room rates and forecasting group profitability. Revenue managers are fast becoming corporate leaders who chair rate strategy committees, train property managers in pricing strategies, and guide sales and marketing teams in the most effective positioning for their selling strategies and campaigns. Every decision they make affects company profitability and because of this the position demands a professional competent in their ability to manage both people as well as revenue.
Revenue managers have two equally important jobs to do to achieve their goal of maximizing chain revenue: (1) develop the most effective rates and strategies to increase revenue; and (2) motivate corporate executives and chain managers to implement those rate and strategy recommendations.
Technology is only half the job
To accomplish the first part of their job, revenue managers need the best technology tools available. This means having a stable revenue management (RM) system that optimizes rates based on accurate analysis of vast amounts of data, including:
Sophisticated analytical tools need skilled professionals to make them perform, and more importantly, to communicate the valuable information they generate to corporate executives and property managers who must apply it to maximize revenue. A 2005 RM study by Softscribe Inc. revealed that in most chain-franchised properties, operators repeatedly resist corporate revenue management guidelines and set pricing and length-of-stay policy themselves based on ‘gut’ instinct. Why the resistance? Many operators lack an understanding of how corporate rate recommendations are developed and do not believe central revenue managers have an adequate knowledge of their property’s unique market to provide realistic rate recommendations. The study showed that the result of not applying optimized pricing was consistently lower property revenue.
With this in mind, progressive operators must look for the following qualities in an effective chain revenue manager:
Andy Archer is Vice President of Service Industries for JDA Software Group’s Travel, Tourism and Hospitality Group. He has extensive experience in developing and overseeing large-scale chain revenue management implementations across the hospitality, rail, tour operator and airline industries.
JDA Software Group Inc. is a sponsor of the
EyeforTravel Revenue Management & Pricing in Travel Conference
JDA Software’s Services Groups (Travel, Transportation and Hospitality)
JDA Software Services Group has pioneered industry leading pricing and revenue management solutions. Today, leaders in the service-based Travel, Transportation and Hospitality industries leverage JDA’s expertise to maximize their profits. JDA clients include Harrah’s-Caesars Entertainment, Omni Hotels, Princess Cruise Lines, Continental Airlines, TUI (formerly Thomson Holidays) and Continental Airlines Cargo.
About JDA Software Group, Inc.
With its acquisition of Manugistics finalized on July 5, 2006, JDA® Software Group, Inc. (Nasdaq:JDAS) is the global leader in enabling more than 5,500 retail, manufacturing and wholesale-distribution customers in 60 countries realize real-demand chain results. By capitalizing on its industry position and financial strength, JDA commits significant resources to advancing the JDA Portfolio® suite of supply and demand chain solutions. JDA Portfolio software enables high-performance business process optimization and execution from the manufacturer’s plant, through distribution to an end customer or a retailer’s shelf. With offices in major cities around the world, JDA employs the industry’s most experienced supply and demand chain experts to develop, deliver and support its solutions. For more information, visit www.jda.com, email firstname.lastname@example.org or call 1-800-479-7382.
“JDA” and “Manugistics” are trademarks or registered trademarks of JDA Software Group, Inc. Any trade, product or service name referenced in this document using the name “JDA” is a trademark and/or property of JDA Software Group, Inc
Sheila S. Blackwell