If you run a hospitality business, you know: the hotel industry is evolving rapidly, customers are increasingly demanding, and keeping up with everything has become almost impossible. The "old" rules no longer apply, and staying competitive requires increasingly specific skills.

Above all, the ability to set the best rates, those that can guarantee the hotel's well-being and the margins needed to improve and offer increasingly exceptional stays.

So many hoteliers like you, right now, are considering hiring a professional revenue manager to solve this problem. If you too are wondering what qualifications they should have and what the pros and cons may be, you'll find all the answers in this article!

What a revenue manager is and what they do

A professional revenue manager might describe their job as “helping accommodations maximize revenue”.

In fact, their primary activity is to carefully analyze all available data, both internal and external, to define the best pricing, promotional and distribution strategies. 

At the operational level, the revenue manager works tirelessly to calculate dynamic rates, monitor and adjust them in the various sales channels, manage hotel availabilities, and coordinate with various hotel departments so that they can react promptly to any changes in the market or internal conditions.

If you want to know exactly what activities you can require of a revenue manager from day one on the job, below is a detailed list.

In consulting it, we suggest you keep our revenue management glossary handy!

Preliminary research

• Study the hotel's target market and target audience in depth.
• Analyze seasonality and identify events/fairs that influence demand.
• Define the most effective distribution channels for the identified target audience.
• Create packages and promotions to boost occupancy during specific periods.
• Plan a rate calendar based on demand forecasts.

Analysis and strategy

• Continuously monitor rate and promotional strategies.
• Analyze pick-ups and OTBs.
• Evaluate facility performance against historical performance, forecast and budget.
• Benchmarking against market and competitors.
• Develop revenue budget (on an annual basis) and revenue forecast (on a weekly basis).
• Publish or update rates in the reservation systems used.
• Optimize performance of distribution partners and contracted rates (OTAs, FITs, tour operators, companies, consortia, etc.).
  

What skills and qualifications should a revenue manager have?

A good revenue manager should excel at interpreting data and conducting accurate statistical analysis. These skills, in fact, are what enable them to read, understand and predict hotel market trends to find the exact point at which supply and demand meet.

Equally important are IT skills: a revenue manager must know how to make advanced use of tools such as Excel, property management system (PMS), channel manager, booking engine, revenue management software (RMS), global distribution system (GDS), internet distribution system (IDS), rate shopper, benchmarking software, etc.

There is no single qualifying degree for the profession of revenue manager. Those working in this field may have a university curriculum focused on hotel management or economics, they may have taken specialized majors or private courses on revenue management, or they may be self-taught with extensive work experience in the hospitality industry.

In addition, being a revenue manager means not only being able to analyze numbers and data, but also having excellent leadership skills, listening and communication skills, resistance to stress, time and priority management skills, and a very high level of motivation and determination.

What is the salary of a revenue manager?

A revenue manager's salary can vary widely depending on several factors, including the size and location of the hotel or hotel chain for which they work, the experience and skill of the individual, and the level of responsibility of the role.

According to data available on Catererglobal.com, one of the leading job boards for the hospitality industry globally, the average annual salary for a revenue manager in Europe is about €49,000 and ranges from a minimum of €43,000 to a maximum of €61,000.

These are, of course, purely indicative figures; each situation will require a specific and accurate assessment.

Hiring a revenue manager: pros and cons

Hiring a revenue manager in your hospitality facility is an important decision that must be thoroughly evaluated, considering both pros and cons. Here we have summarized the main benefits you would gain and the possible challenges you may face.

PRO

Maximizing revenue

A revenue manager, with their ability to analyze and interpret market data and trends, can come up with the best sales strategies. This is crucial not only to ensure increased profitability during peak season, but also to maintain a steady flow of bookings during off-season periods.

Optimize operations

A revenue manager helps improve operational efficiency by ensuring that rates are up-to-date across all sales channels, monitoring and managing availability, coordinating with various internal departments to ensure efficient service, and ensuring that all IT tools in use are properly configured and functioning.

Increasing responsiveness and competitiveness

Even the best sales strategy can fail if it cannot continually and quickly adapt to market changes. A revenue manager allows you to maintain a constant focus on this, without taking valuable time away from the other fundamental, day-to-day activities of the hospitality business. This will give you an unrivaled competitive advantage.

Increase loyalty and reputation

Through segmentation and the adoption of targeted strategies, such as special offers and VIP programs, a revenue manager can help your lodging facility foster returning guests while simultaneously improving the hotel's reputation and thus its attractiveness to potential new guests.

CONTRA

Economic impact

Whether it's hiring a revenue manager, hiring an outside consultant, or developing the skills of an employee already on the team, getting a revenue manager can be a significant cost to an accommodation.

Non-exclusivity

Should the decision fall on hiring an external revenue manager, you will need to consider that they will have more clients to follow. Consequences could be both the frustration of continually chasing the consultant and not receiving all the attention needed to achieve the desired goals.

Human limitations

No matter how well-trained and dedicated to your facility, a revenue manager is a human being and will never be able to guarantee you a constant presence or 24/7, 365 days a year market monitoring.

Need for support

Hiring a revenue manager is not the magic wand that will allow you to completely forget about price management. On the contrary, they will need to constantly interact with you and your staff members to receive data, information and support for strategy implementation.

Vulnerability risk

A facility that entrusts the management of rates to a single revenue manager hands over a lot of knowledge and responsibilities that could make it vulnerable should the revenue manager suddenly disappear or decide to relinquish the position.

Lack of objectivity

Even a vast body of knowledge and experience, while certainly an advantage, can prove to be the cause of major misjudgments. An overly "habitual" approach or a tendency to consider certain market trends rather than others can lead to underestimating critical data, resulting in faulty sales strategies.

Finally, if your idea is not to hire a revenue manager, but to engage in revenue management training yourself so that you can independently manage your accommodation's rates, remember that it may not be enough to attend a training course. You will need considerable motivation, time, and mental energy to acquire the specific skills needed, to apply them consistently, and to stay up-to-date with the multiple and sudden developments in the market.

Now that you have all the necessary information, you can properly assess whether hiring a revenue manager might bring you more benefits ... or more headaches. 

Remember, however, that there are alternative solutions that can not only offer you all the pros listed in this article, but also avoid all the cons. 

Smartness is one of them.

Smartness is the all-in-one platform for managing hotels, B&Bs, apartments, and vacation rentals, designed to be your operational partner. It doesn’t just provide data or streamline your work. It automates the key activities that drive your growth.

From revenue management to marketing, upselling, cross-selling, and guest communication, Smartness helps you achieve all your growth goals with ease.

Want to see how it works?