The Relationship between Revenue Management and Marketing: Part Two
By Nick Curcuru, Lead Consultant – Americas, IDeaS Revenue Solutions
Sunday, 22nd January 2012
This article is the second installment in a series addressing the integration of revenue management and marketing.

In part one of this article, we explored the unique strengths and insights of revenue managers and marketers and how each team can help the other—and ultimately the hotel—enhance profitability by regularly working together. To recap, each department has access to information the other department wants, and when this information is shared, it drives fact based decisions and increased revenue.

However, for many hospitality companies, the challenge is not recognizing how marketers and revenue mangers can help one another and their properties, it's how to change the overall culture and mindset of both departments so that working together becomes a real, regular and profitable business strategy.

To help facilitate the change, this article provides tips and techniques for promoting regular communication between marketing and revenue management.

Schedule a "Kick-Off" Meeting

In order to break down the "wall" that separates these two groups of professionals, it's important for senior leaders of both departments to sit down and discuss the possibility of working alongside one another. Both sides need to ensure that the meeting is a discussion rather than a presentation and that it fosters candid conversation.

Before discussing any details regarding how the departments can communicate better, it's important for revenue managers and marketers to understand that this will not change each department's function or role.  Rather, it's about sharing critical information to enhance revenue, improve the business and strengthen career paths.

In order to maximize the meeting, each team should bring information that can help the other understand how they operate. Revenue managers should bring occupancy forecasts, demand curves, booking pace and guest segmentation data, and marketers should bring their event calendars, promotions and guest segmentation lists.

These critical pieces of information will form the foundation for the "kick off" meeting and serve as a guide for all future discussions between the teams. Once an overview of the information and how it is used is provided, the teams can then discuss their biggest challenges and talk about how—by working together—those challenges could be simplified and overcome.

A sample agenda for the first meeting should include:
  • Introductions
  • Team Goals and Objectives
  • Information Exchange 
  • Challenges and Opportunities Discussion 
  • Action Items (for each team)
At the end of the discussion, participants will leave the meeting with a better understanding about each other's skills, terminology, and business needs and wants. Ideally, the date for the next meeting will be determined, and both parties will leave the meeting inspired and eager to work together.  

Create a Task Force

Although talking about collaboration is a big first step, it's important for revenue managers and marketers to identify a motivated individual or group of individuals who will be responsible for continually bringing the two teams together. 

Even when both parties are on board about exchanging information and ideas, having someone in "charge" of the initiative will help create a common language and ensure that collaboration between revenue management and marketing is easy, continuous and, most importantly, profitable for the hotel.

Responsibilities for the task force should include:
  • Scheduling weekly or bi-monthly team meetings
  • Creating an integrated reporting process that can be continually updated and exchanged
  • Researching opportunities for cross-department education (i.e. webinars, workshops, online courses, presentations, etc.)
  • Planning social gatherings for team building purposes
Assess Available Data and Technology

In the age of flash sales, mobile marketing and social media, it isn't enough to hold weekly meetings between revenue management and marketing.

Because business moves at rapid speeds, marketers and revenue managers need instant access to the information they need to make better, smarter decisions. For these reasons, it's important to review each team's data, along with the processes and technology each department uses to collect and analyze it. This will help both teams leverage all available functionality in order to align goals and mutually determine which information should be shared and how.

Areas to assess include:
  • Marketing campaign calendar
  • Demand forecasts 
  • Booking trends
  • Price, promotion and product fencing
  • Market and guest strategy at the regional and property level
  • Occupancy levels
  • Campaign revenue contribution
Increasing Profitability

With the right approach, revenue managers and marketers can work together seamlessly to help achieve their mutually shared goal of driving revenue at the hotel. By regularly communicating, sharing information and brainstorming strategies, each department will likely see their achievements enhanced, along with their hotels' occupancy and Average Daily Rate (ADR). 

Although the changes will not occur overnight, by working together, both parties and the hotel will realize tremendous long-term improvements.

Nick Curcuru is the lead consultant for the Americas region of IDeaS Revenue Solutions.  Nick has worked for nearly 20 years in operations and consulting, delivering solutions with and for companies such as The Walt Disney Company, Royal Caribbean International and The Home Depot.  Over the last 15 years working for Arthur Andersen and in the SAS Professional Services Group, Nick has focused on high-end analytics working with his clients to enable fact-based decisions by employing data mining, analytical forecasting, and operations research to drive revenue, understand customers and determine the right products/services to offer in the market.

For more information, visit www.ideas.com
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