Faculty & Research
Hotel Revenue Management: Today and Tomorrow
Vol 8 No 14
By: Sheryl E. Kimes Ph.D.
Executive Summary: Hotel revenue management needs stronger support from human resources policies, according to this survey of 186 revenue managers. At the same time, respondents to the survey anticipate that revenue management will extend to other areas of the lodging business, including spas and function spaces. The principal human resources issue involves career paths for employees involved in revenue management. At the moment, the route to promotions for revenue managers is not clear. Some may move up from a single hotel to a group or division, but others may simply find employment in another lodging chain to move up. Moreover, many executives pointed to the difficulty of finding qualified revenue managers. With regard to the extension of revenue management to other hospitality areas, respondents commented that an integrated approach will be necessary. Although revenue management is largely viewed as a technical or quantitative process, pricing strategy and competitive tactics have become strong elements in revenue management. In all categories, respondents living in Asia thought revenue management techniques and issues were in greater need of improvement than did the revenue managers in North America. The dichotomy was particularly pronounced regarding human resources issues, but was also noticeable for technical issues, such as forecasting, optimization, and overbooking, as well as pricing and distribution.
Your Comments Please
If this CHR Report made a positive impact on your management approach or business operations, we welcome your commentary. We would like to post your comments on our website. Please submit your comments to js372@sha.cornell.edu and rohit.verma@cornell.edu.
Download The Report
To view the whole report, please click on the link below
- Hotel Revenue Management: Today and Tomorrow By: Sheryl E. Kimes Ph.D.
| If you have trouble downloading a report, and are able to install software on your computer, try upgrading to the latest version of Adobe Acrobat Reader to see if that allows you to read it. |
Comments
I don't have extensive depth of the hotel business but 20 years of revenue management and related disciplines, and I couldn't agree more on the point of RM the pathway, selection of people, reporting and managements approach to the whole area.
First let me say I cut my teeth in RM in the airline business, the forerunners to the activities and systems used. My experience in the airline business was always revenue analytics first.
A few significant observations in applying for RM jobs in the hotel business and the analysis of the job postings. I see the postings requesting experience in the systems the hotels use. Next is Hotel experience, then sales and finally analytics.
1) The sales area was never in charge as they usually had a volume incentive or potentially other dilutive drivers of incentives. They often are in the same reporting chain as to insure the firm has a balanced cross check.
2) We also never based a hire or promotion based on proficiency with a system as that can always be taught. Experience is an interesting issue as we would hire from a number of different areas, finance, capacity planning or within the revenue management community, airline experience was preferred but wasn't essential. If you read the job postings in the hotel industry that is not how they read.
Twenty years ago in the States and 10 years ago in Europe I would say the most difficult activity has been decoupling RM from sales and training sales on RM. Next was creating the pathway into the very critical tactical area of RM.
Anecdotally I have noticed some improvement when I book a hotel room.
Regards,
John
Partner
LaCosta Consulting Group, Inc.
Other Reports or Articles You May Find of Interest
- Setting Room Rates on Priceline: How to Optimize Expected Hotel Revenue, by Chris Anderson
- Why Discounting Still Doesn’t Work: A Hotel Pricing Update, by Linda Canina and Cathy A. Enz
- Revenue Management in U.S. Hotels: 2001–2005, by Linda Canina and Cathy A. Enz
About Sheryl E. Kimes Ph.D.
Dr. Sheryl E. Kimes is a professor of operations management at the School of Hotel Administration. From 2005–2006, she served as interim dean of the Hotel School and from 2001-2005, she served as the school’s director of graduate studies. Kimes teaches restaurant revenue management, yield management and food and beverage management. She has been named the school’s graduate teacher of the year three times. Her research interests include revenue management and forecasting in the restaurant, hotel and golf industries. She has published over 50 articles in leading journals such as Interfaces, Journal of Operations Management, Journal of Service Research, Decision Sciences, and the Cornell Hospitality Quarterly. She has served as a consultant to many hospitality enterprises around the world, including Chevy’s FreshMex Restaurants, Walt Disney World Resorts, Ruby’s Diners, Starwood Asia-Pacific and Troon Golf. Kimes earned her doctorate in Operations Management in 1987 from the University of Texas at Austin.
For more information visit http://www.hotelschool.cornell.edu/research/facultybios/faculty.html?id=43
