I am often surprised by the initial reaction of many hoteliers. In general we are willing to outsource specialist fields like legal, accounting and payroll, but are not averse to getting professional help when it comes to improving our strategies to generate more income.
– Patrick Landman, Why Would Hotels Outsource Revenue Management
This is an excellent post from Patrick as to why independent hotels should consider hiring someone to handle revenue management duties or assist in their properties. He makes some great points as to what not only a professional revenue manager can do for a property, but also what someone outside of the hotel can do for them.
A similar situation has been happening at one property I am working with which has shown tremendous growth in the nearly two years I have been working with them (I promise to get the annual review up shortly.) They had some Front Desk agents leave, and the new ones are going through some growing pains with learning the property management system, the hotel, and so forth.
The immediate response from the staff at the hotel was: We need to simplify the system and strip down the rates to bare bones.
It’s an easy human reaction to have. When things get overwhelming, we want to pull away, strategize, then attack the problem. With a business, this does not usually mean success. The machine was working before, so why stop it to rebuild it?
The better solution is to work with the staff to give them confidence in using and mastering the system, not to protect them and have them shy away from it. As they grow more confident in the system, they will feel better about overcoming those challenges. If the system was simplified, it would not help them grow as a person and would also not help the business grow.
This approach is easy to see with someone who is involved, but not immersed in the situation on a daily basis. People can easily grow attached to numbers like they do people and be frustrated when things change. A good example: gas prices. When prices stabalize at a certain price point for a week and then increase 5 cents, people easily get upset. Same happens with staff members at hotels. They grow accustomed to memorizing the rate structure in their heads and being able to quote it quickly. A sudden change means they are having to relearn the numbers.
In the case of the property I am working with, a simple demonstration of how the numbers would change was enough to keep the rates the same (a potential drop of $100,000 will do that.) I not only feel confident with the rate structure as is, but I feel confident that the people that have been hired at the Front Desk will be able to quickly master things and help the hotel continue its growing success.
my take on why some hotels are reluctant to outsource the revenue management department especially budget hotels is that they need to have an occupancy percentage of 90-100% everyday.from right after the night audit the conquest for being sold out begin and it won’t end until right before the next audit.having someone on site doing the rev.management is a great asset for he or she can adjust the rate as see fit continually throughout the day to get the sold out goal.the outsource will not do that maneuver or micro manage and that make a big difference and their work is based on unit rate,and a lot of them don’t even do the occupancy forecasting occupancy to up or down the rate.I’ve been watching a hotel that outsourced this year and it’s a mess.
Every revenue manager is going to have a different approach to how they get things done. Isolating themselves from the hotel is never going to be a good thing, regardless of their experience. Apart from setting rates and analyzing competition, I enjoy interacting with the front desk agents and helping them learn different selling techniques, how to upsell, why rates fluctuate, and so forth.
My goal is always to teach and give my toolset back to the hotels so they can be independent once more. Hopefully inspire a front desk agent to learn more and pursue the path of revenue management, and take over my role at the property. Not everyone behaves like this, of course. It only takes a few bad experiences to ruin it for the rest of us.
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