Revenue management is key, Qatar hoteliers agree
Hotel schools must teach revenue management, a panel discussion concluded at the 2017 Qatar Hospitality Summit
Revenue management has become an expert specialism, and hotel schools could do more to equip their students with its foundations; so said the panellists discussing the topic, "Boosting Profitability – Successful Revenue Management" at the 2017 Qatar Hospitality Summit.
Nicholas Chalmers, general manager of Tivoli Al Najada Doha Hotel and Oaks Al Najada Doha, said: “The position of revenue manager has been elevated hugely in recent years. It was a dark science not particularly understood, but it is now a different skillset to what was sat in hospitality previously.
“Director of revenue is a specialist role that requires a specialist person with commercial acumen.”
Robert Jeans, director of sales and revenue for Premier Inn International, agreed: “I’d be looking for an economist – someone with a financial background who understood the impacts of the market.
Revenue managers used to come from the reservations team, noted Sushil Sharma, general manager, Fraser Suites West Bay Doha. “But the person has to have the skills to strategise – to see what is happening and what can we do to maximise business. The role is critical to our success.”
Sharma added that not enough is being done by hotel schools yet on the subject of revenue management. “There is not a specialisation in revenue management – that’s a potential opportunity that the industry can support.
“Revenue management should be taught and experienced very early in our careers. A lot of students come out of [hotel] schools with no understanding of revenue management, but they have the aptitude for revenue management. These schools are missing out on a big opportunity to make a big different to students and to the industry.
“Because I can tell you that [revenue management] is a very challenging position to fill.”
Jeans said that as the role professionalises, hospitality will face stiff competition for staff with the required knowledge and experience. “The people who have those skillsets are paid much higher salaries in other industries. It’s much more attractive for them to focus on the finance industry rather than hospitality.” He suggested exploring economies of scale, such that revenue managers cover multiple hotels.
Chalmers said that as revenue management becomes more technical, the challenge becomes translating their output for people who are not revenue specialists. “Getting the information into a usable format quickly so that you can make decisions from it in good time and understand the trends that are coming round the corner, direct how you spend your marketing dollars and direct your sales team to get the business into the properties.”
Jeans concurred: “Revenue management is evolving at the speed that technology is advancing. The challenge becomes that there is so much data coming from so many places, how do you make that information meaningful?
“And as the booking window gets shorter, people have so many opportunities to book your brand through various different platforms, how do we position ourselves to be in the right place at the right time at the right price?”
“If you don’t have the software or technology in place to react quickly, you miss opportunities.”
All the panellists agreed that competing purely on price is the wrong strategy. Jeans said: “Your pricing decision should never be based simply on your competitors’ pricing. Just because they are dropping their price, if I don’t know what is going on with my customers then making a decision based on someone else’s logic is very dangerous.
“In most cases you won’t find a competitive set that is that close [to your property]. One’s by the beach, one’s by the airport, one has a ballroom, another doesn’t… You should be able to back your logic based on what you know.
Sharma concluded: “The first three months of this year have been a new bottom for this market. There is so much competition for the same piece of business, and some of our colleagues have become very competitive on rates, which is really not optimal for the industry. You need to really understand the optimal price for your property.
“Sometimes it is best to take a step back, watch what is happening and be the last to fill.”
Approximately 200 of Qatar’s hoteliers and hospitality providers convened at the Grand Hyatt Doha ballroom on April 11, 2017 for the seventh annual Hotelier Middle East Qatar Hospitality Summit, a day of industry presentations, panel discussions and workshops dealing with issues and developments in Qatar’s evolving tourism industry landscape. The event was sponsored by exhibitors: Pulsar Foodstuff, The Gourmet Olive Market, A. Ronai, KTC Hospitality Division, Matrix Asset Management Solution, Isukoshi, Grand Strength, Langel and Technogym, as well as workshop sponsor Tink Labs and lunch sponsor Qatar National Import and Export Company.