DALLAS — Revenue management within the hotel industry has never been as affected by labor as it has been over the last 18 months, experts said at the 2021 HSMAI Revenue Optimization Conference.
Speaking during the "A View from the Top: Chief Commercial Officers Take on the Big Issues" session, panelists said labor shortages affect revenue management in multiple ways, from a lack of housekeepers limiting inventory to difficulties staffing revenue-strategy roles.
Garine Ferejian-Mayo, chief commercial officer for Sonesta Hotels, said her company has acutely felt this pain, which has ramped up significantly over the course of the pandemic and labor crisis.
"Finding good talent has been very difficult," she said.
She said more and more hotels are becoming reliant on outsourced labor to fill in the gap left by open positions, particularly in housekeeping and front desk.
Ferejian-Mayo said this puts added pressure on people in data-driven roles to make sure they're offering the right compensation packages and also pricing rooms correctly to make sure hotels remain profitable in the face of labor cost increases. She said that's made them less inclined to lower rates to drive occupancy.
"When you look at the bottom line, we're not able to deliver to our stakeholders in the ownership group" if rates are too low, she said.
Lori Kiel, chief revenue and marketing officer for the Kessler Collection, said she's structured her teams, which fall under the revenue management, sales and marketing disciplines, to incorporate more work from third parties.
"On our [organization] chart, we actually list our third-party agencies along with our in-house team because they are as instrumental to our success as anyone that we hire," she said.
What's important for making the most out of that dynamic is putting actual staff in a position where they can focus on strategy rather than day-to-day minutiae, Kiel said.
"Those individuals focus on top-line strategy, and they're able to do that because we have partnered, for instance, with Marriott revenue management, who does all of the data entry for us," she said. "Those systems can be laborious. We all know that. I don't want my top-line revenue strategists spending time on the keyboard where they should be spending it on the analytics."
Kiel said she's also structured her team to have more members of the revenue, marketing and sales disciplines intermingling to spark fresh ideas and to offer differing perspectives.
"We brought those three teams together and started working and really defining the lanes and then also where the intersections of those lanes should be," she said. "I have to say, I think that was a huge definer for us through the pandemic to have all three teams working together as long as they had. They quickly knew how to adjust even when we were forced to slim down."
Ferejian-Mayo said Sonesta has focused on cross-training employees within those disciplines and prioritized mining their industry for people who might have the aptitude for revenue management and revenue strategy. She added she's even seen general managers eager to jump into revenue-management roles.
Ankur Randev, chief commercial officer for Highgate, said the hotel industry will have to do a better job embracing technology to combat its labor shortages on a long-term basis.
"I think automation is a friend, and this is the opportune time to take advantage of it across the industry," he said.
At a leadership level, Randev said his company has been able to sidestep issues of attracting and retaining talent in the most direct way possible: superior pay.
"We've been blessed in a way that we have a very strong structure, a strong team, strong reputation," he said. "And we've also been notorious for paying above for a long time. That's why I'm here with this company."
Randev said his belief that innovation is required to navigate past this problem is based on the assumption that labor issues will persist in the long term.
Brian Hicks, SVP of commercial and revenue management at IHG Hotels & Resorts, agreed labor and talent shortages are a deep-seated and long-term issue for hotels, and he said a big part of addressing the problem is tackling the industry's bad perception.
"I got into this industry very young," he said. "I got into it because I wanted to travel, and I love staying at hotels. It's just what I love to do. I'm so happy I'm still in it. ... We need to be able to kind of push that message out again in a way that attracts high-quality talent and brings sales people into our world from other industries that are definitely way more boring than what we're in."
He said it's personally disheartening to see people with skills that translate to multiple industries deciding to leave the hotel industry during the pandemic.
"Looking back at all the people that have left the industry, I think that is probably the saddest part of all this," he said. "I've seen some great people in areas like sales and HR move to other industries because of the hit that we took."