It’s been evident to see that the roles of revenue management have evolved significantly over the years. From departmental role reversals to critical new job functions, there hasn’t been a shortage of organizational changes within the revenue management and hospitality industry.
What does the organizational structure look like now and where is it headed in the future? Here are a couple of notable organizational changes in revenue management worth taking a closer look at:
Revenue Management + Sales & Marketing
One of the largest organizational structure shifts to date can be observed by evaluating the relationship between the revenue management and the sales and marketing departments. While the revenue management department may have found themselves reporting to sales and marketing in the past, they may now find themselves reporting to the hotel’s general manager or chief operating officer instead. This organizational shift is actually quite telling in how the hotel industry has strongly embraced the practice of revenue management for not only boosting bottom line profits, but for encouraging its revenue culture to permeate throughout the entire organization.
How else has the relationship between revenue management and the sales and marketing team been changing? Many organizations have also been experiencing a role reversal between the two departments. Rather than revenue managers reporting into the sales and marketing department (which has historically been the case), the sales and marketing organization is now seeing their reporting structure shift under the umbrella of the revenue management department. The sales organization itself has also been experiencing its own evolution over the recent years – and it has been interesting to observe the changing role of the hotel sales manager and sales team. With the complexity of distribution and digital marketing commanding a larger precedence than before, hotels are beginning to see their revenue and digital teams growing and their traditional sales teams starting to shrink.
Revenue Management + Distribution
One could argue the role that distribution holds within the practice of revenue management has experienced one of the most explosive upsurges in the recent past. Having evolved significantly with the influx of new data sources, technology and channels over the past few years, the distribution function could be considered big enough to be on its own – and in some cases, it is. Given the increasing complexity of prices, restrictions, add-ons, channel usage, technology and distribution costs, many hotel organizations have already increased head counts that focus primarily on developing and executing the hotel’s distribution strategy.
However, what exactly does the future of this complex distribution landscape hold? The hospitality industry has never been a stranger to consolidation, and recent industry merges such as Booking.com & Priceline, Expedia & Orbitz and many others, are prime examples of this. How will the continued consolidation in the channel industry affect the complexity of distribution? With the distribution landscape having exploded from simple to complex in a relatively short time frame, will future consolidations eventually begin to simplify the distribution landscape again? If so, what will happen to the strong distribution roles hotels and hotel groups have built up? A change from tactical channel management to strategic channel partnerships will likely unfold.
Revenue Manager vs. Data Scientists
For today’s top hotels, leading innovation in hotel industry analytics has become a critical component to measuring their success. To become an effective leader in innovation, hotels need to focus heavily on evaluating and improving their people, processes and technology. With advances in technology aiming at the right targets – and the processes following right behind it – today’s hotels are critically evaluating their people now more than ever. The role of the revenue manager has increasingly gone under the microscope, with industry experts weighing in heavily about the qualifications necessary for this role in today’s highly dynamic industry. Leading experts agree that the revenue manager role has quickly morphed beyond that of a numbers-orientated reservations manager, or analyst of finances into something of a much higher caliber to set them apart in a competing marketplace of industry analytics.
Hotels are looking progressively at the development of this role as an animated mash-up of three diverse profiles: a mathematician, computer scientist and trend-spotter. This new set of requirements has been driving many leading hotels to replace or supplement the revenue manager by acquiring a hotel data scientist – a position previously dubbed by the Harvard Business Review as “the sexiest job of the 21st century,” and a position heavily employed through the likes of Google, LinkedIn and Uber. When it comes to retaining the people necessary to drive innovation forward, the role of the data scientist is quickly helping hotels rise above the fierce industry competition.