I often teach our revenue management class, which is part of many of Johnson & Wales’s bachelor degrees in hospitality, and it is one of my favorites. If students have an aptitude for this work, they typically become very interested in a revenue management position and we have helped place many of our graduates into those positions since this course began.
What Do Revenue Managers Do?
The role of revenue manager varies somewhat from company to company, but, in general, the RM is responsible for monitoring channel booking activity and rate positioning and for achieving a deep understanding of the demand drivers into their market(s). While parts of the role are increasingly automated, there is still a need for a person who can understand the dynamics of a market and act to maximize the market share for a hotel or a portfolio of hotels. It is an important role because of the effect on market share.
Market share performance is the single most important set of metrics in this industry.
Improve market share and you demonstrate you have the ability to add value.
Demonstrate you can add value, and your career will be bright.
Where Do They Work?
Full service hotels like Marriot and Hilton often have an on-site revenue manager and the responsibilities can extend from rooms operations to meeting space and other revenue generating area (golf courses, spas, etc.). Any time you have a fixed, perishable resource and a variable demand, there is an opportunity to use the principles of revenue management and dynamic pricing. Limited-service hotels (think Hampton Inn, etc.) are typically provided revenue-management services by their brand by a revenue manager who oversees a portfolio of hotels.
Why Choose This Path?
Full Service hotel revenue managers generally report directly to the general manager and to a corporate revenue-management position. It is one of the shortest career paths to GM and increasingly companies are requiring GM candidates to have RM experience, or a deep understanding of it. It is also one of the very shortest paths to a corporate-level role, as increasingly companies are realizing the managing all of the product in a market in a coordinated manner is the most effective. So it is not at all unusual for an entry-level revenue manager to be working on a corporate support team overseeing a portfolio of hotels. Increasingly, the position can work remotely. This is one of the few positions in the industry that does not need to be physically at a hotel or in a market they may be serving.
What Skills Do You Need?
In order to be successful in this role, a person must have the following:
- The ability to learn. Quickly. Markets change, systems change, processes change, forecasting algorithms change, and, of course, the competition is always changing and improving. Each change requires learning and rapid adaptation.
- The ability to interpret data from a variety of sources and use that information to influence decision makers and to act to maximize profitability. One of the most important skills a revenue manager needs is the ability to use their knowledge of future market demand to adjust pricing and forecasts. Most RM systems today use historical-time-series algorithms to forecast future demand — and history is not always the best predictor of future demand. In fact, it rarely is. And without strong market knowledge, a hotel can miss huge opportunities and underperform.
- Excellent communication skills and strong interpersonal-influencing skills. In this role, much of the output is a recommendation, and to be effective you need to be able to “sell” your recommendations.
- Knowledge of game theory and the ability to predict what your competition will do in response to what you do. I often tell my students that they did not totally waste all of that time playing video games. They were learning the basics of game theory and understanding your competitor’s likely reactions.
Whether or not someone chooses a career in revenue management, it is a fascinating and important part of the hotel industry – and many others.
If you are considering a degree in hospitality and need to stay current on these modern trends in the industry, Johnson & Wales University College of Online Education offers an exciting array of hospitality degree programs to help you achieve your goals. Complete the “Request Info” form on this page, call 855-JWU-1881, or email [email protected] learn more.