For most sales teams, at the end of the day, what matters is getting revenue for the hotel. For revenue managers, the goal is to get the right revenue for the hotel.
In a hotel where revenue management culture is not fully embraced, fierce debates between sales and revenue teams are always a typical scene. Sales people are always wondering why the revenue manager is rejecting a piece of business while revenue manager is pondering why sales people are not comprehending why they do not need that type of business. Effective revenue managers are those people that can competently explain to the sales team and to all other departments the logic behind choosing the right business for the hotel.
The data that you need in trying to analyze your group trends and patterns is different from that of your regular demand. Just monitoring your business on the books and pick-up reports will not give you a full picture of your group segment.
Revenue managers need to start collecting group data such as the number of leads received, what is the average lead time, total projected spend, market segment, industry (manufacturing, pharmaceutical, banking, etc.), rejection or cancellation reasons, what is your conversion rate (total groups confirmed by received leads), etc. Revenue managers will then need to analyze these information and compare that data to the past data (last month, last year same time, etc.). This way, armed with all this information, revenue managers can effectively explain or resolve any objections from sales regarding rejecting a business.
A hotel I handled before did not see the need to keep track and understand the patterns and trends happening with their group segment in the beginning. After they had a clear picture of their current group segment situation they realized that they missed a great number of revenue opportunities as they usually confirmed the first business that came in. They saw from their data that during the month of October they would normally get around 85 – 120 leads, with 5 months lead time, high conversion rate and around $75,000 average revenue. But they confirmed a group they received in February amounting to only $10,000 and had to reject a business that came in May that was worth $65,000 due to lack of space. If they only realized earlier the importance of understanding their data they would have yielded a lot more revenue.
On a typical scenario, sales people are always eager to confirm every piece of business that come their way. Nothing against this mentality as it is quite the norm for sales staff to bring in the revenue. It is the responsibility of revenue managers to make sure that the sales are guided accordingly in terms of what type of business should be brought in.
About the author
Rochelle Castillejos is the Managing Director & Founder Hotel Revenue Plus. She has over 15 years of industry experience in the fields of Sales and Marketing, Revenue Management, RFPs (Request for Proposals), IBEs (Internet Booking Engines), CRSs (Central Reservations Systems), PMSs (Property Management Systems), RMSs (Revenue Management Systems), OTAs (Online Travel Agencies), and GDSs (Global Distribution System). She oversaw around 55 hotels in the regions of Americas, Europe, Mediterranean, Asia Pacific and Middle East throughout her career.
