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Wed 8 Dec 2010 12:00 AM

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Knowledge sharing key to the future of RM

IDeaS Revenue Optimisation regional director of sales, EMEA, Rupert Gutteridge, reports from the firm’s annual client summit and identifies the revenue management trends to watch.

Knowledge sharing key to the future of RM

Anyone that is familiar with IDeaS, knows that our
client-centric approach is at the core of our business, and something we take
extremely seriously. Just as returning/loyal guests are one of the most
valuable resources to our hotelier customers, so too, for us, are the revenue
managers within each and every single hotel that we work with.

We believe that the key to the future of the hospitality
revenue management industry lies not just in the advances in technology that
drive it, but in fostering a united international network of revenue management
professionals. Like-minded individuals keen to share knowledge not only to
benefit their own professional development, but also to advance the global
standing of the revenue management profession as a whole.

This global ethos was a very large part of the reason I
joined IDeaS earlier this year, and I have been fortunate enough to step in and
see the benefits that such an approach yields over the long term. Recently I
attended my first annual IDeaS Client Summit in New York City, which is quite
probably the largest concentrated gathering of hotel revenue managers in the
world, and witnessed something I have never come across before — namely the
hospitality world’s most preeminent revenue managers openly discussing and
debating everything from future trends to issues affecting the industry, to
global advances in technology and their potential effects on the industry as a

This year, the key themes centered around the culture of
revenue management — in particular, the changing nature of where revenue
management sits within the organisational structure of a hotel. This twinned
with the ongoing debate over who the revenue manager should report to (which I
am told has been a hot topic for the past three annual Summits), emerged as
keen points of discussion.

Not only was it incredibly humbling to see so many
passionate professionals, at the cutting edge of their game, openly sharing
knowledge and seeking advice from those people that at any other time, or in
any other place, would be perceived to be the competition, but it also struck
me that in this room, over two days of the year, lay the key to the future of
revenue management.

Our industry will only continue to go from strength to
strength if we are able to foster global lines of communication and remind
ourselves that such communication is at the core of the future success and
advancement of the revenue management profession.

Considering the global nature of the economy at present, it
seems that open communication within the revenue management profession has
never been more important in terms of benefits for the industry as a whole. For
example, we found that there has been a global shift towards using more
sophisticated analytics for pricing, in order to increase the effectiveness of
revenue management practices. In the five-star category — and also to some
extent in the four-star space — there has also been a trend towards more
individualised market research to gain insight into guests, and direct
marketing based on that.

Rhett Hirko, director of revenue management analytics for
Hyatt Hotels & Resorts, commented: “Over the last 18 months, with the
economic volatility, I’ve noticed that there is a sharper desire to understand
the impact of market segments more than ever before.  People want to
understand a particular market segment, and know how to market against it, to
improve performance or maximise revenue performance, so before maybe it wasn’t
done with the specific degree of interest in the market segment as it is

Specifically, here at the Summit,
hotels are looking at it with the aim of understanding how to improve the
forecast. Just the keen understanding of the impact of business at the
market segment level — people are more aware of that than ever before. 
That, in turn, improves the forecast and, of course, we’re going to change the
way that we attack our different sales accounts and our different

This testimony echoed a final strong key theme of the Summit, that revenue
management has, and is, moving from a tactical profession to a strategic one.
Getting the right technology to support this move is obviously very important,
and it was found that more hoteliers are now relying more on technology for the
tactical applications of the job.

Automated systems provide the revenue manager
with the right tool to do the right job. They provide the hotel management team
with a view to the true volume and value of demand to come, enabling the hotel
to book the right business at the right time at the right price. The revenue
manager can be more strategic in execution and provide better information
further up the line so that better price setting decisions can be put in place.
Finally, the global trend of creating a culture that supports revenue
management as a strategic discipline within the hotel, has demonstrated the
increasing maturity of revenue management as a whole.

To achieve a deeper understanding of the organisational
culture surrounding revenue managers, we conducted a special global revenue
management survey, where delegates at the Summit
were asked to give their opinions on key issues. Some of our findings included:

1. 35.94% of
respondents expect that RevPAR will increase by 2.5-5% over the next six

2. 62.5% of revenue managers present believe this increase will be driven by rate,
not occupancy.

3. 24.71% of attendees ranked ‘conference & banquets’ as the revenue area they
spend the most time on, over and above rooms.

4. 87.5% of hoteliers
present had a brand active on social media.

5. Of this number, 20.82% ranked Facebook as the most important social media
platform to attracting new guests, followed by 19.33% for Twitter, 14.50%
ranked YouTube and 12.64% ranked their own hotel blog.

6. Of those hotel brands active on social media, 37.7% operated on two platforms,
whilst 27.87% marketed their brand on three platforms and 19.67% operated on
four or more

7. 58.33% of attendees reported that they had experienced declining ancillary
revenue streams.

IDeaS, a SAS COMPANY, is a provider of pricing, forecasting and optimisation solutions and services. IDeaS’ Solutions are implemented via Software as a Service (SaaS) and IDeaS Advantage and IDeaS for Success services help at all levels of a client’s organization. For more information, visit

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