RMS_ButtonLast week Thursday I moderated an expert panel at the BTO conference in Florence, #bto2010, discussing the state of revenue management within the hotel industry. Confirming Xotels’ – hotel revenue management consulting 4 years of revenue management training and consulting we have come to a rather sad conclusion though; many revenue managers still lack basic skills..

Before we get into detail on which skill they are apparently missing, let’s figure what the cause is, who is to blame?
Unfortunately too many hotels are still relying on internal promotion. Which in itself is not such a bad thing, but a good reservations manager, does not make a good revenue manager. The skill set and job scope is different. Reservations is a sales department, revenue management is business analytics. Not quite the same. This doesn’t mean a reservations manager cannot become a good revenue manager. He / she could, but there is the proper training required developing their skills to be able to do the new job.

So what skills do we at Xotels expect from a revenue manager

  1. Economical insight – No man or company is an island. They have to understand the world they operate in. How do currency exchange fluctuations affect cross-continental demand? Why are the dynamics of the market as they are? A good revenue manager reads up on economical news. The Financial Times and the Economist should be in theire briefcase for a quick update on the way to work.
  2. Analytical skills – Revenue management is the equivalent of business analysis in other industries. Very good analytical skills therefore are an absolute basic requirement. One has to be able to cross analyze various date, detect trends and variations, grasp and understand complex data models.
  3. Math magician – Math is at the basis of all analysis. Subjects like statistics with weighted average, standard deviation and variance are important to understand for a revenue manager. You have to be good with formulas and calculations. If you don’t, it will be very hard to develop and understand trend analysis tools.
  4. Spreadsheet master – This is where it all happens for most revenue managers. Excel or any other spreadsheet application is used to recompile data into analyzable statistical overviews and legible graphs. A real revenue manager is at least capable, besides making basic formulas of developing; pivot tables or dynamic tables, macros, dynamic graphs, conditional formatting, lookup references, data filters.

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  1. Technically savvy – Hotel revenue management comprises of steering a great variety of distribution channels, online reservation systems and possibly a revenue management system. These systems have to be well understood and managed. So a hotel revenue manager should know a hell of lot more about systems and applications in general than your average hotelier. Managing a revenue management system is like racing. You won’t win by going 120 km/h. And for driving a formula 1 car you need skills. If not you will not be able to out smartly maneuver the other drivers, and possibly gravity will pull you off the track in a sharp curve and you crash.
  2. Internet geek – Nowadays online sales represents a high of the hotels revenue mix. The influence of the internet is ever growing and other segments like meetings and incentives sales have also made their introduction into ecommerce. A revenue manager needs to know what is going on online, where is the market going, which channels and models are coming up, what are their implications for online travel distribution.
  3. Readers digest – How many and which newsletters and blogs in your revenue manager subscribing too? Is he keeping up with not only hotel industry news, but also with global economical developments? Information is at your fingertips with the internet and there is no excuse to be well read anymore.
  4. Communicative and Determined Strategist – Besides being analytical it is important that a revenue manager is capable of presenting and defend his model and decisions, based on calculation in front of the hotel’s executive management team and possibly owners. He should smoothly steer them away from emotional decisions based on experience and feelings, towards informed and calculated decisions based on statistics. He needs to be strong enough to say NO to the Sales department, and even general manager.
  5. Explorer – Revenue management is business analysis and comes down to taking informed decisions based on statistical trends. Still there is a certain crystal ball part to the job as one never is truly sure about what the future has in mind for us. By using statistics we reduce the risk in our decisions. It will allow us to see the light and choose for a well founded and solid course of action. However, once in a while a revenue manager has to stray away from the common path, to be able to discover new opportunities. He needs to experiment and take risk, without fear, with new strategies and techniques to analyze the outcome. Samples dates need to be tested, decisions logged and outcome measured. A revenue manager who does not have the drive to explore new opportunities, and prefers the status quo, could very likely mean the decay and downfall of your hotel in the long run. We need to stay competitive by being ahead of the pack.
  6. Winner – Maybe more a personality characteristic then a skill, but a good revenue manager has a drive to win. He must want to outperform the competition, and constantly looking to improve his score. Revenue management is like playing Pac Man, it is all about the adrenaline to beat your own maximum score.

As you can see revenue managers need quite some particular skills, which we do not find in the average hotelier. So when we think we would like to promote someone internally, we should really consider if they fit the profile and have the right skills, if not we should provide training or start looking outside our organization.

Various universities and hotels schools have started a revenue management curriculum. However we have found that the freshly trained ‘revenue managers’ lack much insight into the functioning of the hotels front office, reservations sales and marketing departments. As a revenue manager it is important to understand the dynamics and specifics of other departments. Hence such school trained revenue managers should also complete traineeships going through several operational departments.


Sadly we have found many revenue managers to lack these basic skills required to perform well in their job. We hope the industry will wake up and invest more resources and pay attention to get the right people into the right place. We need to pay better salaries and provide expert training programs if we want to achieve better results and regain control of our inventory…