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Skills in revenue management are important, but there are few common structural mistakes that are easy to avoid when building revenue management strategies.


1. Reservation management and revenue management are NOT the same thing

A very common mistake is assigning reservation managers the task of revenue management. Equally problematic is promoting a reservation manager to revenue management director. While there is no problem in moving reservations staff into revenue management roles, they need to first be properly trained in revenue management. While reservations staff have good knowledge of many key subjects related to revenue management, they cannot organically learn the skills of revenue management through day-to-day reservation activities. Hire properly trained and experienced revenue management directors to drive your revenue strategy and execution.


2.  Revenue managers need to report to business heads

Revenue managers need to report to GMs within the hotel, or regionally to the Regional Heads. Revenue managers should not be reporting to sales and marketing directors, VPs, etc. While this should be clear, it’s one of the most common mistakes in revenue strategy. There is inherent conflict of interest between those driving revenue (sales and marketing) and those optimizing revenue. On quite literally a daily basis, a revenue manager will recommend rejecting business or increasing rates. Sales and marketing teams will have a difficult time dropping a “bird in the hand,” especially with all the hard work they have put in to generating deals. There will be inevitable disagreement on chasing the bird in the bush or keeping the one in the hand. The GM needs to be making the final call in those situations, not the traditionally biased sales and marketing director. Furthermore, the clear reporting line to the GM signals to the rest of the organization that revenue management is a critical function and a priority to the business.


3. The revenue manager must be a part of the hotel and, at a regional level, the executive committee

The revenue manager must have all the latest information and be involved in all the critical discussions related to the business. Anything impacting the hotel’s revenue, or ability to drive revenue, should be a consideration in the revenue strategies and is therefore critical information that the revenue manager must not only be privy to, but also in a first-hand way, and not as relayed by a memo or through traditional ExCom members reporting on the ExCom meeting. Again, this also signals to the rest of the organization that revenue management is a critical function and a priority to the business.


4. Weekly revenue meetings with business heads are mandatory

Weekly revenue meetings with the GM, director of sales, and marketing and revenue managers should be held without fail. The meeting should be led by the revenue manager, but the GM must be in attendance. This should not be an ad hoc meeting or a supplemental meeting to sales and marketing or any other meeting. A clear agenda with an action item list is a must.


5. Invest in systems that promote data collection, interpretation, and integrity

Good data is imperative. Make sure you have IT systems which enable proper data collection and offer tools for analysis and interpretation. In nearly all cases, excel sheets are not sufficient to run a property revenue management strategy. There is simply too much data and it is too easy to make calculation errors using only spreadsheets. Revenue managers must make accurate forecasts in almost real-time while crunching complex data sets. This means it’s essential to get the right IT solutions including property management systems, point of sale systems, and revenue management software. And of course, ensure front office, reservations staff, etc. are following protocol to maintain the data integrity.

There are entire volumes written on revenue management skills. Those are great, but never forget the critical aspects of basic structure that will enable those skills to be implemented.

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Before you can decide on a strategy to increase financial performance, you need to have a clear idea of what your objectives are.

First of all, in relation to this question, while occupancy is directly related to revenue it is only one piece of a complicated puzzle. In fact, you could increase your occupancy dramatically and simultaneously see an overall decrease in revenue. Room revenue will always be a direct function of occupancy and room rate, but even then, optimizing room revenue may or may not be the best strategy to optimize total hotel revenue. Furthermore, optimizing total hotel revenue is yet just another step in the higher prize, optimizing the profitability of the hotel (for the moment we’ll side-step questions of balancing profitability with social responsibility and stick to profitability concerns).

You can’t start with strategies for driving occupancies and later attempt to dovetail those into overall property profitability. The approach from the beginning needs to be deciding on bottom line objectives and then structuring strategies that mix cost control with revenue generation from rooms, food and beverage, and other revenue generating departments. These strategies need to take into account both short term and long-term objectives.

On the revenue side, you may have a traditional business hotel supported by guests looking simply for convenience at a reasonable price. In such a case, the room revenue strategy may be the focus with food and beverage adding ancillary revenue primarily driven by those in house business guests. On the other hand, you may have a lifestyle hotel with guests looking for a more social and active experience. This type of hotel may even fulfill aspirational or psychological signaling desires of guests (including leisure and business guests). There may be a large food and beverage component with multiple outlets driving brand image and association desirability. In this case, the food and beverage components may drive a substantial (or even majority) part of the total hotel revenue and could also directly drive increases in room rates and occupancies. So again, the first step is understanding the holistic profitability strategy and aligning all cost and revenue strategies to that broader strategy.

Assuming you have this holistic approach covered and are ready to move deeper into the details, there are two basic approaches in revenue strategy to consider, hard (physical product) strategies and soft (operational management) strategies. (Some mix of the two strategies may be optimal.)

The hard strategies include asset management approaches primarily dealing with how to upgrade or reposition the physical product to better enable the property to capture demand. The soft strategies relate to management driven approaches ranging from PR and marketing to revenue and distribution channel management.

In terms of return on investment, as a first step, soft strategies will virtually always yield higher returns. You can start tearing down restaurants and renovating rooms, but be sure you have fully optimized your operational management approaches first. A renovation or reposition should not be the default course of action for increasing revenue.

PR and marketing strategies are a traditional approach to increasing revenue, there may be some low hanging fruit here, but most likely the best and quickest bang for your buck will be in an increased focus on revenue management. Revenue management, including distribution channel management and inventory control will 9 times out of 10 give you your best ROI on revenue driving strategies.

Top Revenue Management Strategies in a Nutshell

While a deep dive into revenue management is beyond the scope of this short article, there are few common structural mistakes that are easy to avoid when building revenue management strategies:

Hire properly trained and experienced revenue managers. Don’t promote reservations managers to this positions without specific and proper training.

Make sure your revenue managers report directly to the GM. There is an inherent conflict of interest between those driving revenue (sales and marketing) and those optimizing revenue. The GM needs to make the final call when there is disagreement in revenue strategies, not Directors of Sales and Marketing.

Ensure weekly revenue meetings with business heads are mandatory. The meeting should be led by the revenue manager, but the GM must be in attendance. Don’t make this meeting a supplemental meeting to a sales and marketing or other meeting. A clear agenda and action item list are a must.

Invest in systems that promote data collection, interpretation and integrity. Make sure you have IT systems that enable proper data collection and offer tools for analysis and interpretation. Get the right IT solutions including property management systems, point of sale systems and revenue management software.



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The short answer is,Yes! – But it’s not as simple as that.



The Maldives is the highest rate-yielding market in Asia Pacific (Horwath). It has also seen a strong increase in demand over the last decade as tourism arrivals have grown at an average of about 8% per year since 2008. The top source feeder markets for the Maldives also bode well with a favorable mix of geographies to mitigate geo-specific risks – (China, Germany, UK, Italy, India, Russia are the top 6).

There have however, been concerns of oversupply as a rush of new properties enter the market with 17 new resorts opening in 2019 alone. The Ministry of Tourism reports 787 registered accommodation facilities, including resorts, marinas, guesthouses and safari boats. This number will only continue to rise in the coming years.

Developing a resort in the Maldives also brings a host of other challenges. The “one island, one resort” concept makes for wonderful and exclusive getaways, but it also means every island must be a self-contained mini-city with power generators, desalination plants, shipping docks, security, massive fuel storage facilities, and housing for hundreds of full time staff.

Logistics is also a difficulty. The Maldives is a beautiful place, but with a relatively small land area, the country does not produce many of the goods needed to keep a resort operational. Virtually everything must come by boat from other countries. This means supply ships and logistics must be masterfully controlled and managed.

Although there are more than a few challenges to contend with, the Maldives has been a popular place for investment. In the last 10 years, at least 22 resorts have been acquired by international organizations. Yields have ranged from 5% to 11% with a price per key (usually) from USD500,000 to 1,000,000. Most of the properties are 50 to 150 rooms. So if you have an extra USD25 to 150 million, the Maldives could be the place for you

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