Or shall we call it, McRevenue?
- Revenue managers have made profitable investments to carve out their own path in a transformational era
- You aren’t hiring your mother’s revenue managers
- Revenue managers are now expected to deliver strategic performance insights
In the world of fast food, change could be coming. A recent article about McDonald’s speculates that the fast food leader has its sights set on transforming itself into a “credible chicken player.”
Why, you ask?
Well, a deeper dive into fried fowl territory would tap into the desirable market share held by rivals Chick-fil-A, Raising Cane’s, KFC, et al. With U.S. beef consumption declining, and chicken intake on the steady, McDoubling down on chicken could be a powerful play for the popular restaurant.
In some ways, this strategy—investing in and expanding the menu—feels like a page out of a revenue management playbook. Revenue managers, after all, have also made profitable investments and expansions to carve out their own path in a transformational era.
The responsibilities of revenue managers have long evolved past rate management. In fact, the revenue management function has only increased in value as hotels leverage big data, market intelligence, channel strategies and analytical technology to better steer business performance.
In the hospitality industry, today’s revenue managers are now expected—and equipped—to deliver strategic performance insights that can help produce higher bottom-line profits.
The profitability power play
The evolution of revenue management shifts the focus from simply managing pricing to maximizing the profit potential of every hotel stream. For guest rooms, this process leverages the capabilities of data and technology to analytically optimize price, demand and hotel inventory, as well as identify the distribution partnerships that will provide the greatest guest exposure and most profitable returns.
Today’s combination of data, analytics and market intelligence also supports significant moves into more profitable group-management strategies, meeting and event space optimization, and the development and execution of finely tuned marketing campaigns.
The range of flexible, analytical tools available to hotels today helps infuse revenue management’s best practices into virtually every department and revenue stream—giving the entire property team the ability to operate through a connected and big-picture lens.
Connecting different hotel functions with one another to make the most profitable business decisions is one of a hotel’s most lucrative business opportunities—and it’s one that is predominantly in the revenue manager’s hands.
What it takes to compete
Like McDonald’s, hotels must also battle it out with competing properties to gain their fair share of the market. With tight competition and similar online comparisons, what does it take for hotel teams to compete and improve bottom-line profitability?
- You aren’t hiring your mother’s revenue managers. The traits of a successful revenue manager are vastly different than those of previous eras. Today’s revenue managers need to be strategic, analytical, collaborative and great communicators. Sherri Kimes, professor of operations management at Cornell’s School of Hotel Administration, explains the need for a “geek that can speak” in this quick video.
- Building the right tech stack builds the right profits. There has never been a better combination of best-in-class analytical tools available for hoteliers. From machine-learning revenue management solutions to market intelligence platforms to capable property management and central reservations systems, forming a solid analytical foundation will provide the insightful capabilities needed to build a successful performance strategy.
- Are your processes working for you, or are you working for your processes? Optimal processes not only take advantage of analytical outputs, but its inputs as well. Structuring hotel processes around upholding data integrity and analytical decision-making will help increase overall profitability.
In the end, only time will tell if McDonald’s rises to the challenge of delivering “better chicken.” Fortunately, for hotel revenue managers, the strategic toolbox needed to generate better profits is already here.
Jessica Halterman is an experienced hotel professional who has held progressive management roles in sales & revenue, marketing and meetings & events for hotel brand Starwood.
She holds a Bachelor of Science in Recreation, Parks and Leisure Services from Mankato State University, but swears she hasn't watched one episode of Parks & Rec.
Despite moonlighting as a wedding planner on the side, Jessica spends most of her time with family & friends---and instagrams as many pictures of her fluffy goldendoodle, Lambeau, as she can. #lambogram
Latest posts by Jessica Halterman (see all)
- Do revenue managers share a similar strategy with…McDonald’s? - February 19, 2018
- Why rate management is not revenue strategy - February 7, 2018
- The confetti has settled & everyone has gone home, what’s your resolution to maximize profit in 2018? - December 28, 2017