Empower to Eliminate
by Kelly McGuire and Paresh Bhandari
In the past three articles of the DARE series, we shared our thoughts on how leaders can help Revenue Managers (RMs) get more time for revenue generating activities by Delegating (D), Automating (A) or Reducing (R) activities which are not related to revenue generation.
However, this will work only when RMs are empowered to say “No” to performing activities which don’t help them generate revenue for their hotel(s). Activities such as joining every internal team meeting even if it is not related to revenue management, creating reports in different formats based on stakeholder preference, spending weeks creating budgets which don’t add value, adding reservations in the system, responding to guest reviews, or updating OTA extranets.
ZS and HSMAI conducted an industry wide study called Voice of Revenue Manager. We asked revenue managers to report the amount of time they spent on various tasks in their scope of responsibility. What we heard was eye-opening:
· 96% of RMs (almost all) spend time reading out on past performance in stakeholder meetings
· On average RMs spend ~5 hours a week in meetings with stakeholders, out of which ~3.5 hours are spent reviewing past performance
· RMs spend ~18 hours a week (~2.5 days) collecting data and creating reports
Do these activities help the hotel generate more revenue? Maybe not. Some of these activities are important for effective hotel level operations but do we need RMs to spend this much time? Do they really need to spend ~5 hours every week reporting on past performance? Or should we utilize this time to discuss future strategies? Do they need to create same report in different format, just because stakeholders have a preference? Or should they leverage this time to get insights from the report and use it to increase revenue? Just because RMs know how to operate a system like the CRS or PMS, should they really be responsible for maintaining and configuring them?
As revenue leaders we need to help our RMs reduce their non-revenue generating workload, but we should also be helping them help themselves. How can we empower revenue managers to push back on these non-revenue generating tasks so they can stay focused on revenue generation?
We have had the opportunity to ask ourselves the same questions. Over the last few years, ZS has setup an in-house, cluster revenue management team which manages revenue management activities for ~650 midscale and upscale hotels in North America. The team looks after optimizing day to day pricing, managing customer and channel mix, and responding to corporate and group RFPs for their portfolio. They are delivering ~6% RPI YoY growth consistently while managing ~30 hotels per revenue manager.
Over the years we got lot of efficiencies by delegating, automating and reducing tasks but we also realized that all of this is sustainable only if we empower our RMs to question the status quo and challenge activities which are not helping them focus on revenue generation.
In addition, we coached our team to become influencers and ultimately trusted advisors to their stakeholders. This helped them to influence the discussion within stakeholder meetings, ensuring that meeting discussions don’t stray away from the key goal. We didn’t achieve this overnight, in fact it took lot of effort from the leadership to make this happen. We facilitated trainings on being an effective communicator, did role plays with multiple scenarios — stubborn GM to overly cautious GM. We introduced guidelines on agendas for stakeholder meetings, and coached RMs to tactfully direct GMs/ owners to other folks/ teams for tasks which are not RM’s responsibility. RMs participated in call shadows by experienced team members, and received regular feedback. Most importantly we recognized RMs who did really well as “Trusted Advisors”, which helped codify best practices.
Operating in cluster revenue management setting and working remotely made it comparatively easier for us. On-property RMs might face a greater challenge, especially when the person making these requests is not only right in front of you, but also going to review you at the end of the year.
One of the biggest pieces of feedback RMs shared in our Voice of the Revenue Manager study was that they were very frequently asked to provide the same information to different stakeholders in different formats at different times. They had to recreate reports for owners who like bar graphs not line graphs and take three or four calls in a row from GM, sales, marketing and operations asking for the same updated forecasts for the upcoming weekend. This is inefficient (and frankly, annoying). However, it is also hard to say “no” to, especially from your boss or owner, especially when you are working on-property.
The ideal solution to this problem would be to pivot the organization towards self-serve and standardized flexible dynamic dashboards. If constructed properly, these will answer the majority of stakeholder questions, and dramatically reduce the time it takes the RMs to research answers to the “non-standard” ones. This takes investment and a lot of change management.
In such cases, baby steps might be the only viable solution. Have the RMs track the types of questions they get asked by different stakeholders. Maybe there could be an automated “flash” report that contains this information that is either proactively sent out with relevant timing or lives somewhere that stakeholders can easily access.
We have found that many GMs, Asset Managers or Owners don’t even realize the inefficiencies they are creating from what they are asking of their RMs. Sometimes they just make these requests because old RMs used to do it or they just trust the RM more than another person and believe the RM will get it done. Recall that these personas likely have never been in revenue management, so they really don’t know the day to day activities.
One of the potentially most effective solutions is to educate GMs and Owners of the time their RMs are spending on these tasks. It could be enough to just carve out some time to sit with the leaders and explain which reports are produced for whom. Share with them the roles and responsibilities of a revenue manager and what they and the hotel might be losing if RMs continue to perform non-revenue generating activities. You might immediately get buy-in to eliminate their specific report, loop-in relevant teams for specific tasks or even hire a person to perform these activities. But it can’t end there. After you take these initial steps, you should train your RMs to gently push back when asked for something that is repetitive or inappropriate, especially if they are continuing to educate their stakeholders about the variety of responsibilities on their plate and the true impact of the request.
Bottom line: Leaders should listen to revenue managers. Be aware of where and how they are spending their time. Align with them on activities which don’t help generate revenue. And finally, empower them to challenge the status quo, to say “No” and to eliminate activities which distract them generating revenue for your hotels. Leaders need to create an organization structure and culture which supports revenue mangers to say “No” and by doing that they will not only help retain the right talent but also be able to leverage that talent to make more money for their hotels.
