I recently joined a revenue strategy meeting that consisted of stakeholders asking a revenue manager questions solely about reports.
I doubt this comes as a surprise to you.
The fact is, hospitality revenue managers spend most of their time either creating reports or mining those reports to answer questions.
A recent survey of revenue managers ZS conducted with the Hospitality Sales and Marketing Association International (HSMAI) confirms this. Respondents said they had so much data to review that they had little time to actually generate revenue.
“We need to review past performance with different sources, requiring different formats of the same data,” one respondent said. “[This is] very repetitive and time consuming.”
“Revenue managers don't have an edge,” another said. “They are dependent on manual data collection and preparing reports to analyze data, which is time consuming. [This] doesn't give [them] an advantage to lead analytics and recommendations.”
The study shows that revenue managers spend less than half their time on revenue generating activities. Instead of driving hotel earnings through pricing strategies, they’re burdened with highly manual processes, repetitive tasks, non-productive stakeholder interactions, clunky data aggregation and building reports. And when they are able to think about generating revenue, they must also deal with rampant inefficiencies. They are forced to create their own data views and dig through volumes of information to uncover insights.
Revenue managers revealed that they spend approximately 20% of their time (about 9 hours per week) collecting and analyzing data and creating reports. With 10 or more revenue managers, that means your team is spending about 90 hours each week on these repetitive tasks. With 20 or more revenue managers that’s approximately 180 hours. Just imagine how refocusing all that time could impact profits.
Creating an analytics desk to collaborate with revenue managers on information-access and analysis can help. In our example, just two or three analysts focused on creating both reusable and ad-hoc reporting could keep 10-15 revenue managers from having to manipulate data. Revenue managers could then use that time to define and execute revenue generating strategies.
For this to work, leaders shouldn’t just task analysts with ordering reports. They should also consider analysts to be strategic partners that help grow their businesses. Revenue managers should pose requests to analysts as hypotheses. Instead of asking analysts for a report on revenue trends by major urban markets in the Northeast, for example, revenue managers might say: “As senior citizens are getting vaccinated, we should expect them to travel more. How can we capture more than our fair share of senior citizen travel?” This context helps.
It also powers strategic thinking. Defining a problem, developing a hypothesis and then analyzing data to prove or disprove that hypothesis helps revenue managers guide analysts as they search for ways to drive revenue. This approach is always better than expecting analysts to review the entire data set, or to create vague analyses.
As revenue managers and analysts identify revenue opportunities at both portfolio- and individual-hotel levels, they can help their teams to think proactively instead of reactively. Teams can think through new solutions, implement them and analyze their impact. Here is a five-step approach to help them do this:
- Develop a hypothesis. Develop hypotheses for comparable hotels, which have similar customer mixes, locations and brands. This approach will ensure your team proactively strategizes revenue opportunities instead of reactively updating prices compared to competitor rates or past performance records. Revenue managers can add valuable market-level information. This approach helps teams to think both at a top down—or portfolio or brand—level, and at a bottom up—or individual hotel—level. Your team might develop, for example, a portfolio-level hypothesis such as “Length of stay promotions during weekends will help us gain retail price index for the entire portfolio,” and an individual-hotel-level hypothesis of “Shifting business from online travel agencies to brand.com will increase weekend average rate index for the hotel.”
- Collect and analyze data. Standardize your data collection and analysis by creating infrastructure to enable centralized analyses. While it’s an investment, this will enable the team to quickly analyze and share hotel data with revenue managers.
- Generate insights and plan of action. Identify hotel level insights and create action plans. Revenue managers should first review multiple action plan iterations and then choose the most appropriate one.
- Implement your action plan. Align with hotel-level stakeholders and put your plan in place. Revenue managers can help by sharing recommendations and plans and by leveraging standardized reports’ analyses.
- Track its impact. Streamline impact-tracking process. This will enable your team to quickly review any progress and share updates with key stakeholders. Leaders should share implementation lessons with the entire team to enable continuous learning.
Strong collaboration between revenue managers and the analytics desk will help teams to drive key strategies and, more importantly, help revenue managers shift their mindset from price execution to price strategy.
The bottom line: Don’t ask revenue managers to create and share reports; help them to focus on generating revenue. Provide them with analytics support. Enable them to be proactive in identifying revenue opportunities. Engage them in thinking through and developing hypothesis led analyses. Allow them to experiment and learn from the outcomes. Leaders who do so will help create teams focused on revenue.