1 it should be called profit management

6 • HOSPITALITY UPGRADE • www.hospitalityupgrade.com | Fall 2004

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H O T E L R E V E N U E M A N A G E M E N T

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by Mark Haley & Jon Inge

Every hotel manager, operatorand owner has a fundamentalobligation to optimize thelong-term profitability of theassets he or she oversees. Ful-

filling this obligation means increasing ratesduring busy periods and dropping them dur-ing slower times to maintain occupancy or itmeans incurring expenses like a room reno-vation or investment in technology. Given theuptick in demand of the past year, one area ofinvestment more and more hotel companiesare evaluating is revenue management (RM).Hoteliers believe that they can drive increasedprofitability using RM tools and techniques.

Revenue management is more complexthan ever and potentially more rewarding,too. The entire organization must pull to-gether to make revenue management suc-cessful, but the right RM implementation canpositively drive results, creating not only rev-enues but also profits.

Most practitioners accept that imple-menting revenue management in a hotel canincrease revenues 3 percent to 6 percent.Many have won much greater increases.Affinia Hospitality saw revenues increase 17percent over the prior year in the first monthafter implementing manual RM processes ina new central reservations office. The Mil-lennium Bostonian Hotel paid back all oftheir start-up costs and more in the firstmonth after converting from manual RM pro-cesses to an ASP-based service. Harrah’s En-tertainment credited its RM system (installedin 2001) with increasing room and gamingrevenues 13 percent for the year in 2002.

Focus on that for a moment. Implementing revenue management

can increase revenues 3 percent to 6 per-cent, or more.

Then consider that most of that incre-mental revenue flows through to operatingprofit. So, you might think you can increaseprofitability merely by installing a computersystem. Well, not exactly: Revenue manage-ment is not a computer system or a set ofarcane statistical algorithms. It isn’t even adepartment in your hotel. Put most simply,revenue management is a way of doing busi-ness that means every department focuseson what they need to do to drive the totalprofitability of the organization. Computersystems drive a much more disciplined andconsistent implementation of RM, but the or-ganization must embrace the cultural shiftsrequired to benefit from revenue manage-ment. It’s the culture, not the computer.

How Did All This Start?Let’s examine the history of RM and

some of the basic concepts. Many peoplecorrectly observe that there is nothing new

about revenue management. Anyone sellinga perishable product knows that you needto flex your pricing in accordance with de-mand, lead time, competitors and a host ofother factors. Hotel rooms, airplane seats,advertising time, fresh produce and winterclothing are all subject to revenue manage-ment tactics.

Revenue management as a formal dis-cipline has its origins in the domestic Ameri-can airline industry of the 1970s. Estab-lished, regulated airlines were threatened byunregulated charter competitors. AmericanAirlines (AA), led by the legendary BobCrandall, sought to cut the charters off at thepass. AA did so successfully with advancepurchase restrictions on deeply discountedfares. Thus was born yield management(YM), the precursor to today’s revenue man-agement.

AA and other airlines refined and ex-tended their YM capabilities during the earlyyears of deregulation, ultimately giving themthe ability to price every seat on every flightfor maximum value, selling low cost seats toprice-sensitive travelers (usually the leisuresegment) and high-cost seats to time-sensi-tive travelers (usually on business). The im-pact and benefit of these capabilities becametransparent to all observers by the end of1985, when AA reported 48 percent profitgrowth on 14.5 percent revenue growth,while low-cost competitor People’s Expresswas hemorrhaging customers and cash.These financial results and the overwhelm-ing competitive advantage attracted a greatdeal of attention from many industries.

Cruise lines, car rental agencies and ho-tel companies started to evaluate the ben-efits of adopting YM as a business strategy.Early adopters in the hotel space includedMarriott International, Holiday Inns World-wide (now InterContinental Hotels Group),Hilton Hotels Corporation and ITT Sheraton.Organizations with centralized informationsystems and management structures adoptedcentralized systems. More decentralizedorganizations sought property-based systems.

$$$Put most simply,

revenue managementis a way of doing

business that meansevery department

focuses on what theyneed to do to drive the

total profitability of theorganization.

REVENUE MANAGEMENTIt Really Should Be Called Profit Management


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What Does RM Mean?As yield management matured into rev-

enue management, the standard definitionof the art evolved: Revenue management isthe practice of selling the right product(room, seat and banana) for the right price(rate and fare) at the right time to the rightcustomer. In the era of compound distribu-tion channels and merchant model outlets,we can also add via the right channel. Dif-ferent channels demand different prices andyielding strategies, and guests have come toexpect different prices by channel becausethe product itself is subtly different on each.A good example of differentiation by servicecould be a low-priced merchant model roomsale that excludes frequency program pointsor upgrade benefits.

Drilling down on that definition a littlebit, let’s see what it takes to execute againstit. The first building block is an accuraterecord of demand for past arrival dates witharrival date, departure date, booking date,rate and market segment, including book-ing channel, captured for every reservation.The system then calculates the day of week(DOW) for the arrival and departure datesand length of stay (LOS). Ideally, you willstart with just over a year’s worth of history,but that often is not practical.

The next element is data about knowndemand for future arrival dates, again by seg-ment. The revenue management system(RMS) extracts this data from the PMS orCRS daily (or more often) on an on-goingbasis. The historical data, in combinationwith the known demand for future arrivaldates, is then used to forecast demand bysegment for all future arrival dates within adefined window. This forecast is usually sen-sitive to DOW factors and seasonal and secu-lar demand shifts.

The system then optimizes the availablerate and stay pattern controls against the fore-casted demand and makes recommendationsas to what controls to apply on what arrivaldates to generate the most total revenue.Finally, the system captures actual perfor-mance (again via extracts from PMS or CRS)on the arrival date and, in some cases, modi-fies the forecasting and optimization algo-rithms for no shows or walk-ins and theimpact of the controls actually imposed. Thiselement closes the feedback loop and makesthe system heuristic, able to learn from itsexperience over time.

Some of today’s sys-tems optimize ancillaryrevenues as well as roomrevenue. In this scenariomanagement provides anestimated profit marginfor each ancillary rev-enue stream (casino play,lift tickets and food andbeverage sales) as well asrooms margin. The sys-tem then generates rec-ommendations that opti-mize profit rather thanrevenue. For example,Intrawest Resorts’ groupRM module may recom-mend accepting a groupwith a ski lift ticket com-mitment at a lower roomrate than would be sold totransients with a smallerlift ticket revenue forecast.The same logic applies tooptimizing room revenueby cost of distributionchannel.

Most RMSs provide achoice of merely offeringup recommendations orautomatically triggeringstatus and inventory con-trols in the PMS or CRS.A recommendation-driven system requiresmore time, expertise andattention from the hotel’srevenue manager to enterthe recommendation intothe PMS, CRS or otherchannel. A command-driven system automatesthe input, but naturally re-quires a more robust inter-face to the PMS or CRS.

There are also hybrid solutions that allowhotels to establish parameters defining the rec-ommendations that can be implemented auto-matically vs. those that need to be reviewed be-fore implementation. In these systems all, someor no recommendations can be deployed auto-matically depending on the client’s needs.

Some PMS or CRS products offer auto-mated yielding tools that may appear to sup-port RM functions. These features allow thehotel to define business rules sensitive to real-

ized demand that trigger status controls when“X” number of rooms are booked for a givenarrival date. While these triggers offer value anddiscipline in managing inventory, they are reac-tive rather than proactive, responding only topre-set triggers and not identifying changes inbooking pace. We would label these features asrate management, and argue that they do notrepresent revenue management because theylack the crucial forecasting and revenue opti-mization algorithms.

Likewise, a number of business intelligence


Sample Calendar View of an RMS. This screen is where the revenue manager typi-cally first goes in the system. Note flags for high or low occupancy, special eventsand alerts. These flags make the Calendar View exception-driven, so the revenuemanager goes straight to the arrival dates flagged as opportunities to increase rev-enue. Screen shot courtesy of IDeaS, Inc.

The Revenue Management Cycle


(BI) tools provide tremendous analytical support to the revenue man-agement function. Decisions, from Datavision Technologies (http://datavisiontech.com/index.html), extracts a wealth of PMS data on pastand future performance and presents it in an accessible and interac-tive manner facilitating decision-making, but not necessarily calculat-ing forecasts and optimized controls. Affinia Hospitality feeds datafrom their internally developed RM tools, CRM system and other datastreams into a BI cube for analysis, decision support and strategicplanning in revenue management as well as throughout the enterprise.

Revenue Management 101Let’s review some of the fundamental concepts underlying rev-

enue management.Rate vs. Occupancy vs. RevPAR - In hotel school we were

taught to look at average daily rate and occupancy rate. One tells ushow much we got for each room and the other how many of our avail-able rooms we sold. Both are useful, but both only tell part of thestory. A hotel company looking at its business from a revenue man-agement perspective is more interested in RevPAR, or revenue peravailable room. RevPAR elegantly expresses both variables in a singlenumber.

The RM-enabled hotel company establishes incentive compen-sation based on RevPAR rather than rate or occupancy, allowing foreffective comparison of performance across properties and time peri-ods. This dissuades staff from increasing occupancy solely by sellingrooms at heavily discounted rates or selling very few rooms at highrates.

Unconstrained vs. Constrained Demand – Unconstraineddemand is the RM term for the total demand for rooms on a givenarrival date if you could in fact provide rooms for all of that demand.Constrained demand means the total demand you can serve, subjectto the number of available rooms.

Sometimes the concept is applied when a limit on one resourcereduces the revenue potential of another resource. For example, alack of guestrooms can constrain the revenue potential of the casinofloor at Harrah’s. Harrah’s Director of Revenue Management StevePinchuk said, “We calculate total RevPAR as (room revenue + gamingrevenue)/rooms available and our Rainmaker RMS optimizes on thatbasis.”

Displacement Cost – Displacement cost refers to the revenuepotential lost, or displaced, to the enterprise incurred by acceptingone piece of business over a competing opportunity. When a hotelaccepts a group, it may have to refuse some volume of non-groupbusiness as a result. The revenue from that non-group business istherefore displaced, but the question is whether the accepted revenue


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Sample Booking Pace graph. Most RM systems present a number of ways tolook at Booking Pace. This graph shows both definite (blue) and tentative(purple) bookings over the 90 days prior to arrival in a 420-room hotel (hori-zontal black line). Note the sharp drop-off in tentative rooms at about Day -5,indicating the hotel reduced group blocks. Screen shot courtesy of EasyRMS

is greater than the displaced revenue. When it isn’t the net displacement isnegative. If the Sheraton Boston Hotel & Towers accepts a low-rated “leaf-peeper” bus tour for the October foliage season, it risks a net negative dis-placement cost due to not having rooms available for higher-rated corporategroup or transient business.

Spoilage – This is exactly what it sounds like: inventory that goes un-sold when there is unsatisfied, constrained demand in the market. Reasonsfor spoilage include a poor forecast that leads the revenue manager to holdtoo many rooms for late sale at a high rate but the demand never material-izes, bad weather occurs or a group block cancels at the last minute.

Booking Pace – Booking pace is the number of rooms reserved foran arrival date (day 0) as of each preceding booking date (day minus 30,day minus 60). Typically represented graphically, booking date on the X-axis and number of rooms booked as of the date on the Y-axis. Revenuemanagers must intimately understand their booking pace by day of the week.

Data Extract – Reliably extracting data about past demand, futuredemand and actual performance from the hotel’s PMS or CRS is often themost problematic aspect of an RMS implementation. A key point in selectingan RMS is the stability and reliability of the data extract process. It’s criticalthat the systems work well together.

Controls – Revenue management uses controls to fit forecasted, un-constrained demand into available rooms to optimize total revenue. Price isa key control. Others speak to behavioral “fences” governing stay pattern,including Saturday night stayovers, minimum length of stay and so on. Let’slook at a few examples.

Rate Tiers – Remember when the term rack rate meant something?Today, RM-enabled hotels are more likely to have multiple tiers of rates thatare applied to any given arrival date according to forecasted, unconstraineddemand and how far out the booking date is. Sometimes expressed as “ARates, B Rates, …” or “BAR 1, BAR 2, ….”) where BAR means best avail-able rate.

Minimum Length of Stay (MLOS) – MLOS represents one of thekey controls available to the hotel revenue manager. Applied in the PMS andCRS, MLOS increases the total revenue from rooms available for brief peaksby selling them only to guests willing to stay on shoulder nights around thepeak. For example, the gracious and historic White Elephant Inn on Nan-tucket Island routinely applies a three-night MLOS restriction on every week-end in the summer. If you want a Friday/Saturday night stay, you need to stay

There are two equivalent ways to calculate RevPAR:

ADR x Occupancy Percentage

Total Room RevenueTotal Available Rooms

= RevPAR

= RevPAR

R e v e n u e M a n a g e m e n t 1 0 1


Thursday or Sunday as well. However, inApril you are welcome to come for only onenight on any day of the week. MLOS controlshave the singular advantage of being easy toexplain to the guest, an attribute not all RMcontrols share.

No Arrivals/No Departures – Oftenused inside an MLOS restriction, a no arriv-als control disallows reservations from ar-riving on the specified date(s), even if theyexceed the MLOS. Conversely, no departuresinhibits departures. The result is to minimizea peak or valley during the period and spreadmore revenue over more days.

Stay-Throughs Allowed – Perhapsmore of an exception than a control itself,stay-throughs will allow any reservation ofmore than “X” nights to be booked despitethe other controls that are in force, includ-ing a stop sale.

Where Is RM Going?Today, revenue management is an ac-

tive and vibrant market with numerous sys-tem vendors and consulting shops vying forany hotel’s business and promising endlessprofits raining from mountains of new rev-enue. There are more vendors offering sys-tems than ever before and they all report in-creased demand for their products. Thesevendors believe the market opportunity be-fore them is immense.

A survey of RMS vendor executives ask-ing them to estimate the current market pen-etration of automated RMSs received re-sponses ranging from 6 percent to 11 per-cent penetration, converging on 10 percent.Tom Walker of The Rainmaker Group said,“Thousands of hotels representing millionsof rooms stand to increase revenues andprofits by embracing revenue managementas a way of life.” Walker’s colleagues andcompetitors agree. John Romeo, co-founderof Trend FX Solutions, Inc., said, “ASP-basedsystems open up the rest of the market forautomated revenue management solutions.”

Application service provider (ASP) sys-tems allow the hotel to skip buying hardwareand software and instead rent the right touse it on a monthly subscription basis. Mov-ing from property-based systems to ASP-based systems is one of the major trends inthe RM industry today. ASP-products reducethe cost of entry to the point that virtuallyany hotel can afford the start-up fees andmonthly subscription fees. IDeaS Revenue


“Every morning starts with a review of thenightly reports – the pick-up reports for theprevious day, the revised forecast throughmonth end, and so on – to see what changeshave occurred, in which market segments andfor which dates. We also look at any flags therevenue management system has come upwith for us to review,” said Bates.

These changes are then reported to the otherdepartment managers at the morning’soperations meeting, where they discuss actionsto cover any specific issues. “And there’salways something!” said Bates. “Then we goback to make the various rate/room availabilitychanges we need in the different distributionchannels – the PMS reservations module, theCRS, GDSs, merchant model extranets and soon – and update the forecasts once again.

“It sounds obvious, but it’s essential to makesure you do have availability where and whenyou need it, and that never stops for the rest ofthe day. You have to check today’s figures tosee if you want to put any last-minute availabilityout on the merchant models, make sure VIParrivals have the right room blocked, reviewguest requests to make sure you haven’toverbooked specific room types you’ll needlater, monitor extranet allocations and pick ups,check call conversion rates, keep an eye onthe reasons for declines and denials tounderstand the actual demand,” said Bates.

Optimization CEO Ed Booth said, “Given thebusiness conditions affecting the hospitality in-dustry after Sept. 11, we took advantage of thattime to completely re-tool, revise and re-codeour intellectual property to operate on an ASPplatform. Today our clients are executing large-scale rapid deployments with great efficienciesin cost, time and resources.”

Going along with ASP platforms as a busi-ness model (rent vs. own), the same technol-ogy supports large-scale, centralized RM imple-mentations by brands. In system architectureswhere all inventory resides in the CRS, a cen-tralized RM system offers the notable benefit ofa single interface between the CRS and RMS,allowing very effective maintenance of the RMSinterface. It also allows brands to add signifi-cant value to the relationship. Andy Oman, di-rector of revenue management for Carlson Ho-tels Worldwide, said, “We support owned, man-aged and franchised properties on our central-ized TopLineTM PROPHET system. All of the ho-

tels benefit from the integration with our Curtis-C CRS and our ability to help them move from apurely tactical view of revenue management to amore strategic posture. The structure will ulti-mately include competitive set information andforward rate setting to increase the property’sshare of the market.”

Another trend driving larger and faster de-ployments is the ability for some systems to pro-vide a multiple-property view of a market. Thisallows an area manager to control rates andcontrols for the entire market, not only a singlehotel. Delfo Melli of Optims cites using clusteroptimization levers to drive the ability to cross-sell and up-sell among properties revenue man-aged as a group. These capabilities benefit agroup of hotels in several ways:

• They increase revenues for the marketby yielding multiple properties in concert• Selected segments can be steered toproperties with more availability• The hotels share the cost of a dedicated

A DAY IN THE LIFE OF A REVENUE MANAGERChristopher Bates is the regional director of revenue management for Millennium Hotels in theAmericas. Hospitality Upgrade wanted to know what revenue managers do all day. We askedBates: he laughed, took a deep breath and started talking—fast.

Also most revenue managers are eitherreservations managers or have reservationsmanagers reporting to them. “So there is allthe daily activity in the reservations departmentto manage as well – general booking issues,processing no-shows correctly once you’veensured that they really are no-shows andhaven’t just been entered into the system undera different name, handling travel agencycommission queries—it never stops.

“Twice a week we have a specific revenuemanagement meeting with the GM, controllerand director of sales and marketing,” saidBates. “Here we review current status andforecasts, look at specific businessopportunities, restrictions and rates by marketsegment, and any exceptional circumstancesthat will influence previous forecasts. Then it’sback to the systems to input the variousadjustments.”

Working the old way with fixed allocations fordifferent channels had the advantage that youwould get a message when a channel’s blockwas used up, but with most hotels on free saleit’s way too easy to oversell the property atdiscounted rates. “Automated systems andinterfaces make a very significant difference,”said Bates. “All your main channels now lookat the same availability and restrictions. But youdo have to understand what the systems dobefore you can start manipulating their results.”

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revenue manager, thus receiving a higherlevel of productivityEveryone is aware of the proliferation of

new distribution channels. In addition tobaseline PMS/CRS/GDS channels, we now havethe hotel Web site, the brand Web site and count-less third-party online channels. This prolifera-tion impacts the RM process in two key ways:

1 Optimization routines must consider thecost of each distribution channel in cal-

culating what controls will yield the most rev-enue

2 Implementation of recommendationsacross more channels takes more time and

effortChannel management complexity is a core

part of any hotel’s RM strategy, whether or not arevenue management system is involved. KathrynLange of Maxim Revenue Management Solutionssaid, “This increased complexity poses manychallenges to revenue managers, including theneed to optimize net profit for each particularchannel, as well as the time-consuming task ofupdating the controls across channels. AnRMS maximizes net profit by channel andautomatically updates controls to be applied toeach channel, thus maximizing profit while atthe same time minimizing the revenue manager’sworkload.”

Most of today’s systems have somecapability to value groups. The centralquestions include: How much transientrevenue might be displaced and atwhat rate? What rate should weoffer the group? What happens tototal revenue if we can entice thegroup to shift to different dates?

Answering these questions dependsupon strong long-range forecasting algo-rithms in the RMS and the capacity to calcu-late margins on ancillary revenues. A sig-nificant trend in the RMS space today is toextend the reach of the RMS into sales andcatering (S&C) systems. Integration of RMSand S&C systems allows sales managers tovalue groups without opening the RMS andre-inputting the data. Peter Johnson is thegeneral manager of MICROS Systems’TopLine PROPHET unit. Johnson said, “Ourclients have found sales and catering inter-faces to be a popular labor-saving tool thatbrings the value of the RMS to every desktopin the sales office.”

What Are the Challenges?Implementing revenue management is

no simple task. Some obstacles are techni-

cal, such as the reliability of PMS data extracts.Other obstacles are cultural and organizational.Let’s examine some of these challenges.

The question of where to place control ofthe RM function organizationally often generatesemotion and conflict, both within the property andwithin the enterprise. Many properties histori-cally placed inventory controls in the rooms or-ganization, while others put it into the sales andmarketing food chain. Changing the reportinglines in any direction often causes conflicts on theexecutive committee. The historic New Yorker Ho-tel, with 1,013 rooms in mid-town Manhattan,eliminated this issue by moving the reservationsoffice reporting line out of sales and into the rev-enue manager, who now reports directly to thegeneral manager.

At the enterprise level the opportunity to cen-tralize controls offers numerous benefits we havedescribed, including: yielding the market andhigher level of staffing for example. However,many organizations see great risk and organiza-tional conflict in taking the control of revenuegeneration out of the property. Many hotel com-panies opt for a blended approach: Omni Hotels’OmniCHARM (centralized hotel automated rev-enue management) is a completely centralized op-eration from a technology perspective, based onRainmaker architecture. Brad Anderson, corpo-


rate director of revenue management for Omni, said,“Omni employs directors of revenue management at40 hotels who report to their directors of sales andmarketing. Our corporate RM staff of three supportsthese individuals in their use of RM strategies andtechnology.”

Once the organizational issues get sorted out,the hotel company confronts implementation chal-lenges. Obtaining adequate historical data on de-mand represents a significant technical challenge.Property management systems are not built to storebooking pace demand detail, so sometimes initialdatabases are built from manually maintained spread-sheets. We know this to be a painful process. MostRMS vendors would like to have a full year of historyto generate accurate forecasts. But they can beginthe effort with 90 days to 180 days of booking historyif required, noting that forecasts generated early inimplementation are less reliable than forecasts basedon more history.

The hotel must carefully examine rate structureswhen implementing RM. Static rack rates that per-haps vary only seasonally generally get replaced withflexible tiers of rates that vary on any given day. Thisdynamic approach to pricing requires a dynamicmindset in the reservations office, with everyonetrained to always look for rates in the system and noton a chart on the wall. This is an important culturalchange.

The next shift lands squarely on the revenuemanager and everyone up the reporting line: Howmuch trust do you place in the recommendations?At what point does the revenue manager say the sys-tem is wrong and he will keep my discounts off be-cause he knows more than the computer does?

The fact is sometimes an RMS will generate arecommendation that seems at odds with the realworld. Chris Bates, regional director of revenue man-agement for Millennium Hotels & Resorts, said, “Thesystem recommendations are only as accurate as thedata that goes into it. Millennium’s position is that atrained revenue manager working in concert with thesystem generates more revenue increase than the sys-tem alone or the human alone.”

Omni’s Anderson said, “Omni’sCHARM system allows the revenue managerto adjust the assumptions the system usesto forecast unconstrained demand. We usesuch adjustments to depress forecasted de-mand due to events like the SARS outbreakor a new competitor opening, or to increasethe forecast because the major competitorcloses for renovations. In either case,Omni’s experience is that the managementteam comes to accept the system recom-mendations and use them as the produc-tivity and profit tools they are.”

Other property-level conflicts arisewhen the RMS says “don’t take the tour busbusiness.” We guarantee you that the salesperson whose job is selling to tour and travelaccounts will have a problem with that.

As we noted at the beginning, revenuemanagement is a way of doing businessrather than a computer system or a depart-ment. Any given hotel organization is at adifferent point on their revenue managementjourney. Organizations should look at the


Hotel companies invest in RM processes and technology in order to improve revenuesand profits. Having said that, we have learned over time that these investments oftenbring other unexpected benefits with them. We spoke with colleagues David Sjolander,vice president of hotel information systems for Carlson Hotels Worldwide, and BradAnderson, corporate director of revenue management for Omni Hotels & Resorts, toexplore what their organizations have found as buried treasure in the revenuemanagement field. Here are some of the key fringe benefits of embracing revenuemanagement they identified to us:

Revenue Management, with Benefits

penetration of the RM ethos in their companyand identify a strategy for extending it.

A hotel with static pricing models needs tolook at setting rates dynamically and carefullytracking booking pace. A hotel with establishedmanual RM processes should investigate auto-mation. Key considerations will include PMS orCRS interface (data extract and applying con-trols), S&C or channel management interfaces,availability as an ASP and optimization of ancil-lary revenues by margin.

A hotel company with automated revenuemanagement in place needs to look at con-tinuous training and how to drive RM strate-gies into other parts of the organization andover a longer period of time.

Mark G. Haley, CHTP, is a partner in The PrismPartnership, LLC, a Boston-based consultancy serv-ing the global hospitality industry. He can be reachedat [email protected] or (978) 521-3600. Jon Inge is an independent consultant special-izing in technology at the property level. He can bereached by e-mail at [email protected] or by phoneat (206) 546-0966.

P E O P L E

• Reduced turnover amongrevenue managers (establishinga clearer career path keeps highperformers with the company)

• Improved presentation andpersuasion skills amongrevenue managers (by runningweekly RM meetings, theydevelop skills and comfor tmanaging an agenda and sellingrecommendations)

• Elevated sense of teamworkamong management team (byfocusing the entire organizationon revenue and profit, morecohesion develops among thehotel management team)

P R O C E S S

• Forecasting improves significantly, but takesmuch less time to do (better forecasting meansbetter staffing and scheduling; Better staffing meansbetter guest service at lower payroll costs.)

• Overbooking performance improves (much ofthe pain of overbooking goes away and hotels aremore willing to push toward a sellout knowing thedata is on their side. The guest experience improves.)

• See changes in the marketplace much faster(The system red flags problems and opportunities,making it easy to find the cause of the demand shift.The system can automatically respond to suddenchanges in demand, even nights and weekends,meaning the revenue manager can go home at night.)

• Use it as an ad hoc executive informationsystem (Drill down capabilities to examineperformance of past dates and promotions usefulfor future decision-making reaching further up themarketing value chain.)

Harrah’s Entertainment has a centralized RMS withdecentralized control of rates and status.

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1 it should be called profit management

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