Interview: It is a more important job than many in the hotel industry would believe. That is changing but perhaps not fast enough. Tom Walker, director of sales at The Rainmaker Group tells EyeforTravel’s Pamela Whitby why he thinks the role of the revenue manager needs to be taken more seriously.

Is your hotel or hotel chain as profitable as it could be? Are you getting the right business through the door? Do you have a short-term and long-term strategy for revenue maximisation? Are your payroll expectations for revenue management consistent with the ability to attract highly skilled professionals?

If you have to think twice to answer any of these questions perhaps you need to rethink the role of revenue management in your organisation. “Many hotels still see the revenue management position as a junior or mid-tier role in the hotel’s hierarchy,” says Tom Walker, director of sales at the Rainmaker Group. But ideally the revenue manager should be the sort of person that has the “managerial skills to sit on the hotel executive committee or be on a level with the other senior executives in a regional capacity.”

Is RM training doing a good enough job?  From a technical point of view, training programmes are delivering the goods. But today the managerial requirements – of which there are many – are very much learnt on the job. Of course there is a strong technical aspect to the job, but Walker says the managerial side is just as important.

Consider this scenario: A large company, which a hotel has been trying to make inroads with for some time, is trying to book a group stay at a hotel. They want a good deal and the revenue manager is tasked with working out what this is going to be worth to the bottom line. His decision, which he relays to management, is to reject the booking – it is not as valuable as the business it would displace.

Is this the right decision? What if the company finds another chain willing to do the deal and for the next five years becomes a loyal and regular customer on that competitor’s books?    

“The revenue manager is often the person who stands between a person or group getting a room and not getting a room,” explains Walker. “And sometimes the decision they take should be one with a longer term view.”

So in the above scenario, while that first group booking may not have been a revenue winner, the hotel lost out on future business. In this case securing a foothold with a potentially long-term customer could easily be more important than the immediate bottom line. In the same vein, RM specialists have a responsibility for supporting customer loyalty.  “There needs to be a mechanism for knowing who your loyal customers are,” says Walker, “and revenue management tactics need to be aligned with the loyalty programme commitments that make them appealing to guests.”  These kinds of considerations necessitate a strategically balanced blend of short term and longer term thinking.

In essence then, if revenue management is viewed as a key part of the whole business enterprise, then it makes sense to adjust one’s thinking about the calibre of individual selected to occupy the role.

“Revenue management is a not just about making decision to be unilaterally imposed on the organisation.  Sound revenue management decisions often  need to be sold within the organisation in business terms that persuasively reconcile competing interests in guest room availability, ,” says Walker. “The revenue manager not only needs to be able to calculate the best revenue position, but also needs to be able to forcefully and effectively communicate the rationale for revenue maximising decisions,” says Walker. And this has to be done in a non-technical way so that senior executives buy into those decisions and understand why they are the correct ones.

The last word   

Thinking that the revenue management position is a junior role is “legacy thinking” and is not consistent with what is optimal for revenue maximisation in the short and long term. Attitudes are changing, but in many cases there still needs to be a culture shift and a re-evaluation of an organisation’s expectations for the revenue management role.

In the same vein, hoteliers need to consider what sort of person they are looking for and perhaps, he says, update the pay structure of revenue managers. “In many cases, hotels are not willing to pay salaries that the right people would accept,” he says.  

What about advice for revenue managers entering the discipline?  Walker has this to say: “Think not just about the importance of being a technician, but also about developing as a manager, and even being a bit of a politician.” 

If you would like hear further insights from The Rainmaker Group, join us at EyeforTravel’s Travel Distribution Summit, North America in Las Vegas from September 13-14 where Tom Walker will be joined with 90 other industry leading experts. See the full mobile agenda and speaker line up here