Hospitality Revenue: Current trends and crucial steps from revenue professionals
Key takeaways from HSMAI Europe Chief Revenue Officer Executive Roundtable
On January 20, 2023, HSMAI Europe hosted an executive roundtable event inviting hospitality revenue experts to share their insights on current trends and crucial steps to RIDE THE WAVE through these uncertain times. Led by Kelly McGuire, Managing Principal Hospitality at ZS, the discussion was held around a number of questions around topics that revenue professionals have currently to deal with, their perception of the status of our industry.
“Even though we seem to be through the pandemic impacts, there are still a lot of headwinds for our industry. This roundtable was a valuable opportunity for revenue leaders to take a step back and discuss how the discipline can take advantage of all the learnings and momentum from the last few years to tackle the challenges ahead. And it was just terrific to be back together in person for this discussion!”
shared Kelly after rounding off the session
Continue to read to learn the key takeaways of the Chief Revenue Officer Executive Roundtable at HSMAI Europe.
Revenue opportunities to expect for 2023
To start with, the panel discussed the revenue opportunities to expect for 2023. All roundtable participants agreed that the good news is that demand is coming back, now that the pandemic is (hopefully) behind us. People want to travel. It’s a people business. We are resilient as hoteliers. The short-term looks good overall.
The following propositions were made:
- Extra training & education: Improving technology in hotels to overcome staff shortages. But it means that the current and future teams would need an extra round of training and education. Because technology is evolving so fast.
- Use the data: Get revenue managers to have a seat around the table of “key strategic decisions”. They are in charge of actually interpreting the data, not only extracting and formatting it. RM’s should be able to look “outside” to feel and understand the external environment. From the hotel’s side – the objectives in terms of digitization should be set to align the team and follow up on the progress. Teams should stop “digitizing for the sake of digitizing”, and instead know what they want to do with the data they get in order to get the right data.
- Set relevant targets: Setting relevant targets to Revenue Managers, General Managers… is so important to avoid the situation where efforts are stopped/slowed down when the initial (financial) target is reached. Maybe by putting more weight on global quality in the hotel, and less on profits.
Short-term revenue challenges
After discussing the opportunities in the field of revenue management roundtable participants went through what they consider as “challenges” for the coming months.
- Challenge 1: General lack of knowledge in Revenue Management. The development of technology is especially a concern with the current level of staff turnover. In some regions, teams may not be willing to do the extra step. The motivation level can be perceived as low in some hotels. We are not doing enough in terms of “long-term sustainability” training. Revenue Managers are overriding 20% of the recommendations in the system! (Source: ZS HSMAI Europe survey, 2023)
- Challenge 2: Culture could be seen as an obstacle in the integration of data analytics and forecasting in the hotels decision process making. This situation may be exacerbated by the high number and variety of machines (e.g. PMS) in a given brand /company. The lack of standardization is a real issue in some instances, with too much information to manage. The “analysing the analysis!” syndrome is an even bigger problem at property level.
- Challenge 3: The relationship between Revenue Managers and Business Developers may also be seen as a challenge. Participants agreed that Revenue Managers’ capacity to convince their audience, internally but also externally (e.g. owners) is key! It is one of the key competencies that Revenue Managers will need to possess in their skillset. They should be able to deal with ambiguity: how to take the discussion where it should be going, how to manage arbitration…
- Challenge 4: GDPR is still a challenge for some of the Revenue Managers: how to track customers while respecting the law?
- Challenge 5: Payment processes are a big one too. There are so many ways to look at it, with plenty options to choose from, lots of scenarios to manage.
Shumi Khan, SVP Business Intelligence & Revenue Management at Accor, and Chair to the HSMAI Europe Revenue Optimization Advisory Board, comments:
“Automation and machine learning is not new and has long been instrumental in driving faster decision making and better commercial outcomes across many industries, but within the hospitality industry there is still a high level of scepticism around deploying such practices: revenue managers need to let go of their spreadsheets and let the machines do the nitty gritty.”
Participants closed the second part of the meeting by sharing their point of view on how inflation and the cost of living is likely to impact hotel demand. Some “shifts” are already visible in the booking conditions: people tend to favour flexible reservation conditions. Besides, the average length of stay is increasing.
Revenue Management Survey Results
The third and final part of the Chief Revenue Officer round table was spent around the analysis of the global study of property level RMs called “Voice of the Revenue Manager” conducted by HSMAI and ZS. Based on the comments and answers of a few dozens Revenue Managers in Europe, some interesting figures were shared:
- 50% of the Revenue Manager’s working time is spent on non-revenue generating activities.
- They spend an average of 11 full time weeks to prepare and finalize the budgets
- 74% of their time is spent alone in front of a computer
- 32% of strategy meeting time is spent to convince stakeholders to align with strategies, and 79% of their recommendations are accepted by stakeholders
Participants agreed that the standardization of processes and practices in hospitality are very important. They are the foundations. But today they are not clear and properly set. This is becoming critical with the current staff shortage situation. That being said, everyone concurred that the needs and wants will vary according to owners and General Managers.
What do the Chief Revenue Officers dream of?
The discussion concluded with everyone around the table receiving a “magic wand” and making a wish. In their dreams, chief revenue officers envision a world where:
“Hospitality is the most desired industry to work in”
“The education of the teams and managers (through learning & development) is top level across the board”
“There is only one PMS (and one RMS) in the world”
We are the creators of our dreams, so let’s make it happen! Become a member of HSMAI Europe to keep your finger on the pulse for resources for professional development, commercial strategies and sustainability in the hospitality, travel and tourism industry.
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Founder & Director at Hotel Games,
Former VP of Global Learning & Development at Accor,
Former Chair HSMAI Region Europe’s Advisory Board on Revenue Optimization