by Glenn Withiam
With even more powerful computers and sophisticated financial models, revenue management is well integrated into the sales programs of most hotels. We can expect further expansion of revenue management, probably in other hotel divisions.
Revenue managers themselves will require greater analytical skills and management experience, but one factor seems to be holding things back; this factor is human resources.
Expectations of expansion, and the idea that revenue management departments need the attention of human resources, are the main findings of a study conducted among 186 revenue managers by Sheryl Kimes, a professor in the school of hotel management at Cornell University. The full report can be read at the Cornell Center for Hotel Research: "Hotel Revenue Management: The Present and the Future" (the following URL takes us to a summary page where you can download this report, at no cost: www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-14927.html). Kimes conducted his study to determine what state revenue management is in and where it's going.
First, on the issue of where revenue management is going, managers expect revenue management to extend to spas and functional spaces, as well as food and beverage operations. While the room division remains the largest revenue resource for most hotels, those with spas and restaurants could have more revenue from those divisions. Kimes says some hotels have integrated their sales of functional space into the revenue management of the room division.
Revenue supervisors predict that once hotels have explored all possibilities for room earnings management, expansion will be imperative for further revenue growth. One thing that is important to note is that managers outside of North America thought their revenue management operations were in greater need of technical improvement than North American operations.
In relation to the issue of the current situation of the human resources problem, revenue supervisors identified four fields in which the development of revenue management operations is most needed: the lack of a career path for revenue managers, the challenge of hiring qualified supervisors, the need to provide appropriate training and policies to retain talented supervisors. Needless to say, these problems are related. For example, the lack of a clear career path makes it difficult for hotels to find qualified revenue managers and, once hired, it is difficult for an individual property or a particular chain to retain a talented revenue manager.
Over time, that person may move on to a larger hotel, another market, or move on to another corporate-level position. When faced with these options, some supervisors leave the industry at the same time.
It is important to note that this study is not intended to encompass the entire vision of all industry players, as the surveys were only sent to revenue management professionals. In addition, those who answered the survey, instead of being chosen randomly, are self-selected, this may skew the results, but it seems reasonable to believe that these revenue managers have a very solid management over the current situation of the hotel industry in relation to revenue management.
*Glenn Withiam is the director of publications at the Cornell Center for Hotel Research.
