News for the Hospitality Executive
"Changing the Perception About Revenue Management
Within an Organisation is a Slow Process”
Revenue and Pricing Strategies in Travel Special
August 21, 2008 - Revenue management as a discipline finally seems to be getting its due in the industry.
For their part, some senior practitioners of RM acknowledge that rather than only focusing on the technical skills (Pricing, Accounts Analysis, Distribution Channels, and System Configuration), the RM teams should also concentrate on other areas such as management skills.
In order to know more about the role of revenue managers, EyeforTravel's Helen Raff recently interviewed two revenue managers - Gregg Chapman, Manager, Revenue and Profit Management for Walt Disney Parks and Resorts and Melissa Skluzacek, Director - Pricing & Revenue Management for Midwest Airlines.
Here is what three executives, who all are scheduled to speak during EyeforTravel's Revenue Management and Pricing in Travel conference, scheduled to take place in Las Vegas this October, had to say:
Helen Raff: Considering your vast experience, what's had the biggest impact on the way you do you job especially over the last couple of years?
Gregg Chapman: The biggest impact for me has been technology. Science has evolved and technology has enabled revenue managers to process vast amounts of information. Before this technology was available, a revenue manager was not always able to execute their goals.Helen Raff: Is there is a danger that overuse in technology can downplay the humanistic side of Revenue Management?
Melissa Skluzacek: Revenue management is both science and art - models can't know everything and although you can use historical data as guidance, you still need to qualitatively estimate how the future will differ from the past.Helen Raff: Has the perceptive of revenue management changed? Do people understand what you do?
Gregg Chapman: Changing the perception of revenue managers within an organisation is a slow process – you have to continually proselytize and evangelise about your science. You have to explain what revenue management does and what value it brings to your company.Helen Raff: As revenue managers, do you often conflict with other departments in your organisation, and if so, why?
Gregg Chapman: The obvious conflict is between sales and revenue management and this is an area that we are continually addressing. The goal of the revenue manager is to maximize company profit but the goal of a sales team is often driven by a static volume target. In a perfect world, sales people should not be penalized because of revenue management decisions that may result in reducing their volume but increasing profit for the company.Helen Raff: What should a revenue manager do during times of an economic slowdown?
Melissa Skluzacek: Right now, it's a double-edged sword for the travel industry – first there is a slow down in the economy and then there is the increase in fuel prices. Revenue managers need to forecast the impact of these factors on demand more accurately than ever.Helen Raff: Finally, is it a struggle to recruit and retain revenue managers, and what do you look out for?
Gregg Chapman: Few people truly understand revenue management; even internal departments get it wrong. The first challenge is to get people to actually seek out a revenue management role.
Gregg Chapman, Manager, Revenue and Profit Management for Walt Disney Parks and Resorts, Susan Cary, Director of Revenue Management for Alaska Airlines and Melissa Skluzacek, Director - Pricing & Revenue Management for Midwest Airlines will all be speaking on this issue at EyeforTravel's Revenue Management and Pricing in Travel conference on October 1-2 in Las Vegas.
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