Revenue management is critical to the commercial success of any hotel, so what are the requirements for the job today and are there any particular challenges facing hoteliers in the Indian market? EyeforTravel’s Pamela Whitby finds out in this exclusive interview

Without sound revenue management practices a hotel business simply cannot grow. So for Saurav Puri, director of revenue management at The Ritz-Carlton in Bangalore, it is absolutely critical for the revenue management function to work across all revenue generating departments. “This can bring insights which can then help one develop strategies to optimise revenues as well as profitability for all points of sale,” he says. Some hotels, for example, may have significant revenue contribution from food & beverage or even ancillary departments so it is all the more important, says Puri, “to focus strategically, and drive total hotel revenues”. By applying revenue management across the business also creates a synergy among key stakeholders, which in turn can impact on profitability.

Talent challenges

Along with continuous advancement of the discipline, Puri says “it is critical as well as challenging to get the right talent”.So what exactly are the qualities required by revenue managers today? “Understanding the business and forecasting accurately is vital as everything we do in revenue management revolves around it,” says Puri. However, he is quick to stress that knowing the customer inside out is essential too because only then is it possible to sell and market to them directly. “Understanding the customers reaction to pricing changes as well as understanding our competitors’ strategy is also critical,” he says, adding that inthis highly competitive market, a strong focus for revenue management today must be on sales, marketing & e-commerce strategies.

On top of having business acumen and revenue management skills, a revenue manager also requires softer skills to effectively communicate with all relevant stakeholders. “With diverse responsibilities of our discipline, revenue management professionals need to focus on continuous development as well,” he stresses - that means constant training.

Perhaps most importantly, however, RM professionals must be able to effectively use data to understand dynamic buying patterns and explore opportunities across all channels and segments. “Advancements in technology have stimulated enormous data collection,” says Puri. “Analysing, transforming and effectively using data to implement strategies is a space to watch.”

Puri’s top tips:                       

1.     Don’t be afraid of technology

2.     Don’t over complicate the job; rather continue to focus on basic core principles

3.     Be proactive by keeping track of changes in the economy and the business as well.

4.     Understand whether you want to be part of the pricing battle or enhance and strengthen competitive marketing efforts.

Indian insights

If role of the revenue manager isn’t tough enough already, the Indian market poses some specific challenges. If you consider the last four to five years in India there has been a major increase in supply, but this has not been matched by demand, explains Puri. As such average rates have come down as hotels have tried to maintain occupancy levels. In addition, new hotels are springing up all the time. With an average 110% increase in supply expected over the next five years across cities in India, revenue management will be under intense pressure to maintain rates. All this coupled with rising inflation has impacted profitability and there are even greater expectations to drive top line revenues.

So in India a primary focus right now for hotels and their revenue management teams is to optimise all channels and look for emerging sources or alternative channels to sustain and grow the business. “Revenue managers increasingly find themselves having to work closely with marketing and e-commerce teams to adapt to advances in social media and online marketing,” says Puri. “This has evolved to be a key channel and influencer for our business.”

In India then, the business environment for hotels has become highly competitive and a key challenge for revenue managers is to develop strategies aligned specifically to this market.

To hear more insights from Saurav Puri Director Of Revenue Management atThe Ritz-Carlton, Bangalore join us in Singapore for the Travel Distribution Summit, Asia 28-29 May