Revenue Manager vs Revenue Management System

Today artificial intelligence is widely used in many industrial processes for the production of goods and services and, in most cases, it is decisive for the optimisation of work in many aspects. If we were to compare the same task performed by a computer system with that performed by a human being, the result would be merciless and, why not, even predictable.

In the hotel industry, the use of artificial intelligence is represented, among others, by the Revenue Management System.

The Revenue Management System is a system used to analyse customer demand in order to optimise inventory and price availability while maximising revenue growth.
Using the right information, the RMS develops pricing strategies by adjusting the sale of products to the right customer, at the right time, at the right price and through the right distribution channel.

In practice, this software would be able, on its own, to optimally perform the sales of your establishment on autopilot. If this were the case, all hoteliers could sleep safe.

That's right: just think of the awareness of being able to count on an infallible or almost infallible system that allows you to achieve considerable goals in terms of turnover, with almost non-existent error margins and cost savings in human resources, more precisely in the figure of the Revenue Manager.

The Revenue Manager is the professional figure who implements sales techniques to maximise turnover.
This is the summarised definition of the job of us professionals, but have you ever wondered what our tasks are specifically? Here are some of them:

• Development and management of pricing and inventory strategies for all customer segments, making the best use of distribution channels, including Otas and Gds.
• Analysing and creating weekly, monthly reports in order to identify key factors for achieving revenue and market share targets, evaluating the effectiveness of the strategies applied.
• Providing guidelines to Reservation, Event & Congress departments.
• Creating monthly and weekly forecast reports.
• Ensuring that hotel staff assimilate how to achieve Revenue targets and performance analysis
• Monitor rates of direct competitors and develop Benchmarking activity
• Configuring and entering rates in the Property Management System
• Recruitment and training of the people who contribute to the achievement of revenue targets, such as the Reservation Manager and his team.

Naturally, these tasks are carried out with the help of various IT tools designed to assist and not replace the professional figure, such as our Data Warehouse, a software for the exclusive use of the INSIDER team, thanks to which it is possible to analyse both internal and external data in order to combine them to develop the best performing strategy.

During the two-year pandemic, the figure of the Revenue Manager was of paramount importance: as we all know, all the metrics that had been used up until then to monitor KPIs (keys performance indexes - profitability indicators) were completely zeroed out along with all historical and forecast data, because nothing like this had ever happened in the past and the only objective was to contain that unstoppable flow of cancellations and to navigate on sight for what little demand remained for the following months.

A bit like a long-distance captain who during the biggest storm ever tries to bring his ship to safety, or at least with as little damage as possible.

In those moments, the only weapons at our disposal were the experience gained in the field during our career (usually those who aspire to the role of Revenue Manager, among other skills, must have held the position of Front Office Manager for at least three years) and intuition.

Yes, it is intuition that allows one to interpolate market dynamics in advance to establish a winning strategy, all combined with a deep knowledge of the subject and above all of the structure, from its strengths to its weaknesses. Both qualities belong only to those who face in the field the many challenges that the hospitality sector offers every day.

A Revenue Management software lacks the above-mentioned elements and some might say that the margin of error of an artificial intelligence is almost nil in the phase of calculation and combination of data that it draws from the PMS to then elaborate the correct strategy, in the right period, etc. etc., but one wonders if this is sufficient and if it can perform optimally, in full autonomy and above all in line with the real potential of the structure.

We have tested it and are happy to continue and work with our IQ.

I have read that relying on a Revenue Manager, or, as in our case, on a Revenue Management Consulting company, has the downside of entrusting the marketing of one's structure to someone who does not live its dynamics 100% in presence and that, once the respective mandate is over, whoever takes over, new collaborator or owner, has to start from scratch.

In reality, we are always in constant contact with the structures we follow, both in person and remotely, we share every single strategic choice based on the objectives agreed with the owners, we collaborate with and train the staff of the marketing, booking and front office departments, we discuss with the utmost transparency all the results achieved with in-depth analyses, so that all the staff can participate in the success of the company and why not, perhaps one day continue independently along the path taken by the revenue management consultancy...... artificial intelligence has nothing to do here.

carmine pellecchia

Senior Revenue Analyst