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The Changing Role and Future of Revenue Management
Siv Forlie, SVP, Revenue Optimization & Customer Strategy, Genting Cruise Lines


Siv Forlie, SVP, Revenue Optimization & Customer Strategy, Genting Cruise Lines
There is room for the discipline to grow and expand its focus while working to improve profitability for hotels.
Legacy structures, legacy mind-sets and legacy software solutions must go! Revenue management is a great discipline to review operational efficiencies and communication, ensuring every revenue generating asset in the property and the staff that manage these have a revenue management mind-set and work together.
Growing focus on the customer journey is changing the revenue manager’s responsibility. As modern revenue management is heavily impacted by technology and systems in organisations which have invested in efficiencies, to analyse the customer journey at all touch points is an important task. Good revenue managers spend a sizable amount of time mapping out customer journeys and make sure every property has offerings to entice them to book. They look at properties through fresh eyes, identify under-utilised assets and create a market that drives profit from them - including testing and implementing revenue management principles on food and beverage outlets and conferencing spaces.
With many hospitality organisations moving from analysing data on small scale, we now see organisations that take data seriously moving in the direction of setting up centralized data science teams that allow the staging of data; enabling data analytics on a different level. Big data is not the goal. The goal is better data and better decisions. More data is better only when revenue management analytics improve price-demand estimates, provide controls for your particular business mix and pricing strategy, and enhance the optimization process.
The future
It’s important to remember revenue management’s mission from its humble start in the 90’s: to answer business critical questions like what to sell, when to sell, whom to sell, at what price to sell. This is done with data-driven tactics, strategies, and predicaments of customer’s behaviour at the micro-market level. Revenue management leverages mission-critical, real-time insights generated by business intelligence that collects data, interprets it and presents findings on key performance indicators as identified by business stakeholders. This will always be the mission of revenue management, however as tools and skills evolve, more attention is given to how and how well it is done.
The future of revenue management is likely to be more than total revenue management, faster market report generation and individualised room rate adjustment on the fly. A fine balance between revenue management strategy formulation, decision making and the application of artificial intelligence must be found, and good things are likely to happen.
My advice to all organisations with a revenue management discipline? Invest in your people and this will lead to improved profits. The business discipline of revenue management demands highly skilled business analysts with exceptional skills in revenue management and distribution knowledge but they should also be experienced in data analysis, digital marketing, consumer psychology, critical thinking and innovation. Today’s revenue managers must possess exceptional communication skills to influence decisions by educating key stakeholders on their concepts and ideas. Appropriate education is key to develop and hone these skills as well as improving enablement and engagement.
A truly effective revenue management strategy requires time and skills, and this has always been a huge challenge for many organisations. Revenue management is not a set-and-forget process – it is a constant work in progress. While technology has made the revenue management process more guided, there are still large sources of untapped revenue for most operators. The key to revenue management success in 2020 – and beyond – is to embrace the challenge, invest in talent, and give it the time and attention it deserves and requires.
Check out: Top Revenue Cycle Management Technology Companies
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