After having taken the plunge into revenue management (see Part 1) you will need to start navigating the revenue management journey. Only very few people are gifted or talented in a certain area and most of us will need to learn and practice to become good at something. The fortunate thing is that in revenue management we want to make things easy and logical. So learning how to navigate the revenue journey can be done with a step-by-step approach. By Derek Martin.
So you’re the CEO, VP Operations or run a cluster of hotels. And you need to find out where you are in your revenue management journey and where you want to take it.
Whether you operate theme parks, attraction parks, movie theatres, cruise ships, campsites, or of course hotels, you have realized that driving revenue by applying revenue management principles is something that should work for you.
But what are the steps involved in getting the revenue management journey started and going in the right direction?
Mapping the Journey
As with every journey, there are 3 key questions:
- Where am I today?
- Where do I want to go?
- How do I want to get there?
To find out where you are today you need to ask yourself some questions:
- Is revenue thinking ingrained in all parts of the organization?
- As the first solution to profitability issues do you think about driving revenue? Or do you normally think about cutting costs first?
- Do I have tools in place that help me understand where I am at all times? Do I have a dashboard of critical revenue management information?
- Do I know the speed I am travelling at? And what distance I need to go?
- Do I have the right people in place that can drive the car?
- Am I letting an 18-year-old drive my Ferrari? Do I need to get a better driver?
There is a lot more involved here, but when you look at these questions and you have said ‘hmmm’ to one or more of them, then you need to do a deep dive into your organization to find out how ‘revenue’ focused it really is. Being revenue focused is one of the most critical success factors of any organization.
To find out where you want to go can be a challenge at any time:
- Do you want to beat your competitors?
- By how much?
- And beat your budget?
- And be a preferred employer?
The three questions about mapping the journey are not random. In every organization, your customers, your owners and your associates are the key stakeholder groups. And during the revenue management journey, they are all three sitting in the back seat and need to be kept happy. So for each of them, you will need to embed their objectives into your revenue management goals.
All of the above works for many industries. In the next few articles in this series, I will take you through some of the steps of getting revenue management in place in an organized way.
About the Author: Derek Martin is the founder and CEO of TrevPAR World – a hospitality data analytics company that specialises in total revenue management as well as hotel distribution including sales, marketing and social media.
For more information visit www.trevparworld.com