BALTIMORE—For all their intelligence and savvy, when revenue managers discuss key strategies and data to various stakeholders within a hotel, those items often get lost in translation.
It’s not enough to crunch the numbers; the best revenue managers also to be able to communicate them, according to experts during the “Translate Math to English” panel at HSMAI’s Revenue Optimization Conference.
Failure to do so will not only result in less-than-informed decision-making, but also it puts the position of revenue management in the back seat, said Heather Scharmer, manager of revenue management education for Four Seasons Hotels and Resorts. If stakeholders can’t understand revenue managers, then revenue managers effectively lose their voice.
“We need to translate data into different languages that different people understand,” he said. “One size doesn’t fit all.”
Some people like charts, while others like tables. Some might be focused on the bottom line, while others might be focused on operational strategies.
“How many have you come into work (in the) morning and you get asked, ‘How’d we do last night?’” Scharmer asked. “We have to think about what it is the person who’s asking the question is looking for.”
The panelists outlined areas of focus when addressing the following key stakeholders:
Owners
“What do owners look for?” Jacob asked. “Profit, (return on investment) are key elements.”
They also focus on their hotels’ performance versus that of the market. “How are you doing?” Jacob asked. To answer this question, benchmarking data from the likes of STR, parent company of HotelNewsNow.com, is critical, he said.
Owners also want to know strategies to better position their property in the marketplace. Revenue managers should expect to answer questions such as:
- What does the future look like?
- How do you get there with a plan?
- How are our revenue strategies helping to preserve asset value?
“The numbers can be interpreted in various different ways. It’s key to figure out what is critical in driving those numbers and translating that,” Jacob said.
For example, if total rooms sold at a given property are down 2,000 for the month, an owner might interpret that as a very bad thing. However, if the property is losing those roomnights as part of an effective strategy to drive higher-rated business and thus more revenue at the bottom line, then the loss is actually a very good thing.
The numbers must be presented in a way that presents the overall picture as opposed to a single strong or weak data point, Jacob said.
On-property management
GMs and other on-property managers typically look for information that impacts or drives operational strategy, Scharmer said.
GMs, for example, should be aware of initiatives such as pricing strategies that aim to push higher occupancies.
While performance metrics are certainly important, information concerning earnings before interest, taxes, depreciation and amortization and other financial numbers might cloud the picture. The goal is to keep the message clear and on point, Scharmer said.
Sales
While revenue managers must communicate effectively with all stakeholders, the need to work closely and effectively with sales is absolutely critical, the panelists said. As such, data should be streamlined to focus on key pricing decisions, target customer segments and any other information that could enhance sales efforts.
But it’s not enough to simply share the data with the sales team. Revenue managers must initially work to get buy-in by highlighting the “why” behind certain strategies. A revenue manager might be hard-pressed to tell a salesperson to not book a ready and available piece of business. But if that same revenue manager can show that a high-priced piece of business is available and waiting in the ranks, then the directive should prove much easier to swallow.
Executives
For revenue managers fortunate enough to get ear time with a high-ranking company executive, the key is to keep the message short and on point, panelists said.
Think of the presentation as a list of very high-level bullet points. Some areas to consider:
- What does overall performance look like at present?
- Where do opportunities exist to drive revenue, and what strategies are being employed to get there?
- What weaknesses exist, and what strategies are being employed to improve upon them?
- Where is performance headed, and what strategies are being employed to improve upon or achieve that outlook?