Overcoming Barriers to Total Revenue Management

By Juli Jones, CAE, Vice President, Hospitality Sales & Marketing Association International (HSMAI)

For many hotels, Total Revenue Management is just too big of a bite to chew at one time. But that shouldn’t stop you from digging in. Start with something that is practical and achievable to help build non-rooms RM experience and muscle: applying revenue management principles to other revenue streams.

At a roundtable session at HSMAI’s recent Revenue Optimization Conference (ROC) in Houston attendees explored obstacles to doing this along with strategies for overcoming those obstacles. Here are key recommendations from attendees’ discussions, which were facilitated by Bonnie E. Buckhiester, president and CEO of Buckhiester Management Limited:

OBSTACLE: Technology Infrastructures


  • Use AI and VR technology to showcase the hotel before the guest arrives.
  • Communication remains key here! When the technology is there, it’s crucial for directors across outlets (e.g., spa, golf, F&B) to regularly communicate and strategize with each other.

OBSTACLE: Obsolete Financial Practices


  • Make sure cost and profit by channel is visible on the P&L.
  • Have RM initiate the forecast/budget instead of being driven by historical financials, or a need to hit static/rigid targets.

OBSTACLE: Limiting Metrics


  • Capture room number with each POS transaction to tie each sale to a particular group segment.
  • Advocate for and help develop an industry standard for what costs need to be accounted for.

OBSTACLE: Organizational Structures


  • Institute consistent communication among and between revenue-generating departments to build teamwork and strategies for pulling out additional revenue.

OBSTACLE: Willingness to Change


  • Bring data to the table and use storytelling techniques to show the potential gain/benefits of doing things differently.
  • Understand reasons for hesitation/resistance and work systematically to overcome them.

OBSTACLE: Incentive Frameworks


  • Incentivize on total hotel revenue (or profit) versus rooms revenue.
  • Connect sales incentives to RM goals.

OBSTACLE: Limited Resources


  • Utilize your existing resources to their fullest extent — making sure you’re getting as much as possible out of the CRM, BI, and other data tools you have.
  • Know your strengths and leverage what you have — people, systems, vendors, and the physical asset itself.

OBSTACLE: Functional Silos


  • Gamify education to apply RM concepts to each department. (Check out HSMAI’s RO2Win online education program for a tool that can help.)
  • Use shared KPIs for incentives to ensure objectives are aligned and benefit Total Revenue Management.
  • Ramp up your communication — with a focus on building more engagement, in which everyone participates to get to the common goal.

Categories: Revenue Management
Insight Type: Articles