Centralisation of Revenue Management

Survey ResultsSeptember, 2011

A centralised RM culture primarily evolves around two main elements: people and technology

The revenue manager will not need to be present at the hotel site

Essential to convey a holistic understanding of how departments can contribute to raise revenue by sharing common values, beliefs and day-to-day working attitude

To avoid discouragement and frustration of the operational side the RM culture should emphasise on a stronger collaborative and team-work to maximise the advantages of local knowledge and centralised strategic decisions

Firms implementing centralised RM will need to re-assess the career prospects of RM staff

Revenue managers in charge of a centralised system must dispose of a broad variety of skills and expertise

Revenue Managers may need to be sourced from other business areas

Revenue analysts have few career development opportunities which may lead to a higher labour turnover

The central RM department should not be an independent office located outside the hotel but actively intertwined in daily operations

Locally based staff need the ability to recognise the importance of a combined decision making process that involves the contribution of the on-site team feeding the system with fundamental information

A centralised RM strategy will only be effective if supported by a strong revenue management culture

It will be difficult to source centralised revenue managers who are experienced in managing multi properties

Your Head Office believes in centralised RM and would support remote multi property Revenue Managers responsible for the company’s inventory

Today’s revenue manager is adequately equipped to manage within a centralised environment (manage multi properties, multi tasking, have an extensive range of knowledge across systems and best practices)

0 2 4 6 8 10 12 14 16 18 20

Centralised Revenue Management

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

Respondents (Directors of Revenue Management)

Have you been involved in moving a number of hotels from unit level revenue management to a centralised approach?

Yes No

How did you/would you develop a collective understanding to ensure the realisation of the established business goals?

Work with a consulting firm to implement change management strategiesA series of in-house training sessionsBring in an external training teamAssign responsibility to regional RM teamAssign responsibility to unit General Manager

To what extent are/were revenue management practices already in place?

Fully automated systems and processes in all hotelsSemi-automated systems and processes in all hotelsFull manual revenue management processes in place in all hotelsSome manual revenue management processes in place in all hotelsHad to develop RM from scratch

When moving to a centralised RM function, what has to change?

LeadershipGoalsObjectivesTechnology

Resources

Skills and knowledge

Need for interaction

People development

Expectations

Definitions of in-company standards and processes

0 2 4 6 8 10 12 14 16

Strongly AgreeAgreeNeutralDisagreeStrongly Disagree

6. Implementing a centralised RM approach: What has to change with regards to people management

related aspects?

Internal P

olitics

(line/su

perviso

ry leve

l)

Internal P

olitics

(management)

Cultura

l

Economic

Emotional

Technica

l0

2

4

6

8

10

12

Strongly disagreeDisagreeNeutralAgreeStrongly Agree

7. What is the biggest obstacle to implementing centralised revenue management?

Education Communication Participation & involvement

Facilitation & support

Negotiation & agreement

Manipulation & co-optation

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Strongly AgreeAgreeNeutralDisagreeStrongly Disagree

8. Which strategies can strongly contribute to overcome the above selected obstacles?

Front desk

Reservations

Finance

Sales

Food & Beverage

Night Audit

0 2 4 6 8 10 12

Strongly AgreeAgreeNeutralDisagreeStrongly Disagree

9. Key individuals at property level understand RM/how to positively impact revenue

The division of the roles into revenue analysts and one central or regional revenue manager will generate a significant power shift

The downgraded revenue manager may still need to compile data for the central office on a regular basis

Promoted centralised revenue managers will need coaching and mentoring

The culture of the hotel will need to change at all levels of management including Board level, Exec, Snr Management and GMs

Essential to assess the risks, resource/costs to complete the transition from single property to central

Culturally, attitudes towards working with a central support team have to be understood through an awareness of the long term benefits

Effective communication: Only through the buy in and understanding of hotel personnel would the transition be successful

Reporting; Figures to be on the GM desk first thing in the morning

Revenue managers must be available to attend site revenue strategy meetings where required

Important to have reporting lines into central RM and no longer GM

Supportive instruments essential e.g. training and educating central RM on new ways to manage their time better, ensuring a support service in place i.e. junior analysts to manage extranets and database structure to manage pricing (RFP) processes etc

0 2 4 6 8 10 12 14 16 18 20

Strongly DisagreeDisagreeNeutralAgreeStrongly Disagree

10. Last Question