It’s Budget Season: Do you know where your revenue manager is?

In most of North America it’s getting a little bit cooler, the kids are back in school, and football is in high gear – all sure signs that it is Budget Season!

While budgets are important for tracking planned activity, they can also serve as invaluable tools to assess how your properties are performing. To help hoteliers get the most out of those tools, and the process of developing them, HSMAI’s Revenue Management Advisory Board recently discussed the question of, “From the revenue management perspective, what are you watching for and thinking about as budget season ramps up into high gear?”

Here is where their thinking, and likely that of your revenue management team, is going:

The Numbers

  • As always we’re keeping an eye on what the pundits say…and asking ourselves why it is so. From higher than expected supply to lower than expected demand to the deceleration of RevPAR growth to shortened booking windows on the leisure side, we’re taking trends into account in every budget we do, but we’re not letting ourselves necessarily be led by them.
  • The U.S. presidential election – and the impact of it – is on our minds. We know that the markets don’t like uncertainty, and I’ve not witnessed a more uncertain election!  Merrill Lynch has a helpful article that frames the issues involved here:  How Presidential Elections Affect the Markets. In addition to the election, we are also considering the impact of headwinds such Zika, Brexit, a strengthening US dollar, etc.
  • Based on a survey of the data and forecasts out there, some REIT guidance has been on average 2-3 points lower than what our management companies are saying. Is it because the REITs just want to hedge their bets heading into a tough earning season? Or, do they know something we don’t know?
  • For the book direct campaigns, we’re still waiting to see what the broader impact is. While some hotels have been negatively impacted by rate erosion, we are not currently asking hotels to break out the rate and profit impact of book direct.
  • Trying to understand booking patterns today sometimes feels like trying to hit a moving target. We are having our agency track date inquiries from our website to get a better sense of the booking lead time. Are guests looking earlier and extending the discovery window?


  1. We’re spending a good amount of time understanding what we can do to shift the right resources (human and financial) in order to focus on the customer segments with the most upside to drive profitability for our hotels.
  2. Our teams are thinking about how to change some compensation practices to incentivize staff based on property profitability. We’re aligning all revenue generating departments around the same goals – from sales and revenue management to ecommerce and social to the general manager – and taking into consideration the true costs of acquisition.
  3. The operationalization of the Marriott-Starwood merger will be interesting to watch. From a tech perspective we are interested in what will happen to those companies’ two different, proprietary revenue management systems. From a talent perspective, will there be an opportunity to pick up some great new players for our team?

Alternative Lodging

  1. We are being challenged to better understand the rental market – there are only a couple of big players and there aren’t really any standard benchmarks or data reports, so we’re trying to figure out how to get around that. Airbnb Action is now publicly sharing data about some markets, and we’ll continue to seek other reliable sources like Airdna and Inside Airbnb.
  2. When it comes to the sharing economy we talk an awful lot about Airbnb, but we can’t overlook the other major players in this space including HomeAway, VRBO, TripAdvisor Vacation Rentals, and others.
  3. Some owners are encouraging us to place hotel rooms (mainly condo rooms and villas) on Airbnb. I think it will become more and more common to use it as a true distribution channel for some types of inventory.

Preparing for a Recession Without Causing One

  1. We are having a lot of discussions about being reasonably conservative; there isn’t a lot of confidence from owners about 2017 being a peak year.
  2. What about the oil market? When will we see some recovery there for the 39 markets impacted by that industry?
  3. The advisory board just released a new short video on this topic with advice and insights from key revenue management leaders: How Do You Prepare for a Recession without Causing One?


About HSMAI’s Revenue Management Advisory Board

HSMAI’s Revenue Management Advisory Board is advancing the revenue management discipline by providing leading education, a best practices exchange, thought leadership, and networking for revenue management professionals, other sales and marketing professionals, and senior management in the hospitality industry. 2016 members include:

  • CHAIR: Linda Gulrajani, CRME, Vice President, Revenue Strategy & Distribution, Marcus Hotels & Resorts
  • Calvin Anderson, CRME, VP of Managed Services, Duetto
  • Chris K. Anderson, Professor, Cornell University
  • Veronica Andrews, CRME, Director of Active Data, STR
  • Christian Boerger, CRME, CHDM, Corporate Director of Revenue Strategy, Pacific Hospitality Group
  • Denise Broussard, SVP, Revenue Management & eCommerce, Interstate Hotels & Resorts
  • Rosemary Browning, President, Global Career Horizons
  • Tom Buoy, CRME, EVP Pricing and Revenue Optimization, Extended Stay America
  • Janelle Cornett, Regional Director, Revenue Management, TPG Hotels and Resorts
  • Kathleen Cullen, CRME, Senior Vice President Revenue & Distribution, Commune Hotels & Resorts
  • Tammy Farley, President, Rainmaker
  • Neal Fegan, CRME, Executive Director of Revenue Management, FRHI Hotels & Resorts
  • Monte Gardiner, Sr. Director, Revenue Management Services, Best Western Hotels & Resorts
  • Nick Graham, VP, Hotel & Transport, Hotwire
  • Kelly McGuire, VP Advanced Analytics, Global Analytics, Wyndham Destination Network
  • Karen McWilliams, Vice President of Revenue Strategy, Concord Hospitality Enterprises
  • Breffni Noone, Associate Professor, Pennsylvania State University
  • Garth Peterson, CRME, Area Manager – Americas Sales, IDeaS – A SAS COMPANY
  • Scott Pusillo, CRME, Vice President, Market Strategy, Viceroy Hotel Group
  • Tim Schulte, CRME, Solution Consultant, Infor
  • Jim A. Struna, CRME, Director of Revenue Management, Auberge Resorts
  • Tim Wiersma, Vice President, Revenue Management, Red Roof Inns, Inc.
  • Monica Xuereb, Chief Revenue Officer, Loews Hotels & Resorts
  • Nicole Young, CRME, VP, Revenue Management & Sales, SBE


Categories: Revenue Management
Insight Type: Articles