Creating a Revenue Management Culture at your property requires significant effort from the revenue team, as outlined in Revenue Journey #3: Starting with the Foundations – People. This cultural shift is an ongoing commitment in any revenue-driven organization. It entails implementing processes and Standard Operating Procedures (SOPs) that are essential for executing revenue management effectively.
Tailoring Processes to Your Business
Each business operates differently and exists within its unique market. While many processes and SOPs may share similarities, they must be customized to fit the individual needs of your organization. This is why many companies engage consultants to assist in this important tailoring process.
Processes That Support Decision Making
As previously discussed, various roles exist within the Revenue Journey, and processes should be established for each of these roles. For revenue decision-makers, processes must empower them to make impactful decisions that enhance revenue. These processes should facilitate revenue generation rather than merely serve as controls.
One of the most critical processes is holding regular revenue meetings. In these discussions, past decisions are briefly reviewed, and guidance is provided for future revenue-generating strategies. This guidance should then be communicated to all revenue influencers.
Revenue meetings should be held consistently—preferably weekly—on a designated day and time. These meetings are essential to the success of your property, as decisions made here can determine whether you meet your budgetary goals.
Participants in these meetings should come prepared and actively engage. The core attendees typically include the Revenue Manager or Director, the Director of Sales, and the General Manager. While others may occasionally join, it’s vital that only key revenue decision-makers participate in these discussions.
Processes should also ensure that only designated revenue decision-makers are responsible for determining pricing and inventory management. Pricing guidelines need to be established during the weekly revenue meeting, with all group quotes validated and approved by the Revenue Manager or Director. Pricing for other segments—including online business, packages, and wholesale—should also be set in these meetings.
Additionally, the team should discuss inventory management and implement controls that further optimize revenue. By definition, the Revenue Manager or Director is responsible for preparing the revenue budget, with input from other stakeholders. If your Revenue Manager is not currently handling this responsibility, it may be time to reassess their experience and role.
The Revenue Manager is also responsible for preparing revenue forecasts, which will be explored in greater detail in future articles.
Processes for Revenue Influencers
Revenue influencers are typically on the front lines, engaging directly with customers. They require the right tools and guidance to proactively drive demand for the property. It’s essential that these influencers understand the rates and benefits they can offer while having clear guidelines regarding their sales boundaries and instances where authorizations or validations are necessary.
However, these processes should not overly burden the revenue decision-makers, preventing them from focusing on optimizing overall revenue. In properties that manage revenue manually, it is helpful to implement selling calendars, rate grids, and established selling guidelines, including ceiling and floor rates for group sales.
Additionally, a group evaluation tool—either through Excel or a revenue management system—can assist revenue influencers in preparing accurate group quotes.
Essential Processes to Formalize
The number of processes that need to be formalized will vary based on the size of the hotel or business, whether it’s a hotel, parking facility, or attraction park. At a minimum, the following processes should be established:
Regular revenue meetings, complete with an agenda and decision communications.
Revenue budget preparation processes.
Revenue forecast preparation procedures.
Selling guidelines and calendars for sales teams.
Group evaluations and quote protocols.
The telephone selling process for reservation teams.
A review process for evaluating past decisions.
Distribution processes for various channels.
This list represents just a few of the critical processes that a property should have in place, and many additional ones can be developed. In the next article, we’ll explore forecasting, a fundamental aspect of effective revenue management decision-making.
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