The changing role of the revenue manager

What is the role of the hotel revenue manager?

The role of the hotel revenue manager has traditionally been to make decisions impacting room revenue—including rates, occupancy and lengths of stay. Today, the role has expanded to include leadership for total hotel revenue management, an increased focus on optimizing profit, and greater influence across the entire organization.

Hotel revenue management has played a critical role in the success of lodging operations for more than 30 years. In today’s digital travel environment, revenue managers have access to more data, more systems and more channels than ever before. This added complexity, coupled with an expanded influence and responsibility, is driving demand for technologies that improve revenue performance and overall competitiveness.

Research insights reveal new challenges in an evolving role.

In order to better understand the changing world of revenue management, Expedia Group worked with Phocuswright, a leading travel market research agency. Conversations took place across the globe, in many languages, and with all types of properties to identify the current challenges faced by revenue managers and opportunities to better support them. 

From these discussions, we uncovered five key themes:

1. Information overload impedes optimization 
2. Disparate systems are slowing decision making
3. Complex distribution is impacting conversions
4. Gaps in information are impacting forecast accuracy 
5. Expanded role emphasizes total hotel revenue leadership and profitability.

Information overload impedes optimization

“There is so much information out there. How do you best filter it and how do you decide what to focus on?”

The challenge:

Today’s revenue managers are optimizing demand across multiple distribution channels. With web analytics, online travel agencies (OTAs), and travel aggregators all providing performance data, revenue managers are finding it difficult to sift through the vast amounts of data to make smart, timely business decisions.

There are many revenue management solutions available to help simplify some of this complexity. But, surprisingly, only around 15% of properties are currently using these solutions.

The opportunity:

Lodging businesses of all sizes, but especially medium and smaller properties, can now adopt easy-to-use revenue management tools and systems that help filter and interpret key data points, making it easier and faster than ever for revenue managers to act on real-time market insights, and allowing them to explore deeper with further analysis if needed.

Disparate systems slowing decision making

"We need a solution that consolidates insights from across multiple systems—with an intuitive dashboard; that can be accessed anywhere.”

The challenge:

Not only are the ever-expanding volumes of data a challenge, this data is also coming from many different systems and sources, which are not always integrated. As a result, today’s revenue managers are spending much of their time collating and aggregating data. This leaves little time to analyze, and worse, less time to make strategic decisions that drive business.

Many properties are using manual processes to create forecasts of demand and supply for inventory, prices, lengths of stay and more. This is both time-consuming and prone to error.

The opportunity:

The industry as a whole can harness the power of fully integrated revenue management tools that pull together data from all disparate systems, for making better recommendations and analyzing financial results.

Complex distribution is impacting conversions

“There are too many channels to keep track of. It’s hard to understand the behavior of every type of traveler and what their purchase paths are.”

The challenge:

The hospitality industry and traveler market are constantly evolving. With new property types, new competitors, and various distribution channels to consider, properties are finding it more and more difficult to deliver personalized offers through the right channels. As a result, revenue managers are reconsidering how they manage prices and content across their channels in order to stay competitive.

The opportunity:

Revenue management vendors and travel intermediaries (such as online travel agencies (OTAs), search engines, metasearch and social media sites) should continue to work together to simplify revenue management analysis and provide suggested next-best actions to revenue managers.

Gaps in information impacting forecast accuracy

“Intermediaries have an opportunity to support hotels, to be proactive in reaching out and to share information about the customer journey.”

The challenge:

Where can I find missing information? Despite all the data available, many revenue managers believe that they are lacking important information to help them make effective decisions. From needing more granular data to analyze cost per acquisition versus revenue produced to wanting to incorporate demand data indicators into their decision-making, more complete data would improve forecast accuracy.

The opportunity:

Travel intermediaries and particularly online travel agencies (OTAs), have the opportunity to close the information gap by sharing traveler buying information and destination demand and distribution data that is not available elsewhere

Expanded role includes total hotel revenue and profitability

“People are starting to understand that revenue management can aid in decision-making throughout the organization. We own the data and the insights that are able to increase revenue performance for the entire organization.”

The challenge:

Wearing many hats, revenue managers are doing more than ever for the business. No longer solely focusing on rate and inventory management, they now influence all aspects of hotel management, and usually are involved in other business functions including marketing and sales operations.

The opportunity:

Many revenue managers are being asked to lead organizations’ efforts to increase overall revenue contributions. There is an opportunity to redefine the revenue management role as a unique leadership position within your organization.

How can Expedia Group help?

“Rev+ has eliminated the time-consuming process of independently shopping properties. It’s easy to spot trends and make changes to rate or demand. And it’s not just about lowering rates, I’ve identified opportunities to raise them as well.”

Citlali C., Revenue Management & Guest Relations,
San Remo Hotel, USA

To help revenue managers maximize their time, Expedia Group developed a suite of free tools, including:

• Rev+, a revenue management tool that aggregates our global travel data set and real-time market-level data in one place. With this information at their fingertips, revenue managers are able to easily understand the current state of occupancy and how their customized competitive set has set their rates.
• Property Analytics reveals performance against key metrics, tracks year-over-year trends and provides access to market share reporting. To help facilitate faster, better decision making, we identify areas of focus and suggest actions to help you improve.

Explore all our tools for revenue managers and discover the foundation Expedia Group is building to support the future of revenue management.