‘Pecunia non olet’ – money doesn't stink. Yet somehow, money does always tend to exude an unsavoury aroma; we are all aware of the reputation of those who have devoted themselves to profit maximisation. In our sector, revenue managers tend to be lumped together with this group, albeit undeservedly.
text: Wilhelm K. Weber
What attracted you to the hotel industry? We have all been asked this question at some point, and the standard response is “I enjoy travelling for work, and always wanted a job where I could bring a little joy to people from all over the world.” Or: “There is no better reward than a smile on the face of a satisfied guest.” Or: “I'm a people person, and love giving my all for guests and employees every day, even at the weekends or over Christmas, or when everyone else is on holiday...” But let’s be honest: we’re in it for the money! And that’s it. After all, none of us would think of smiling at a complete stranger and saying “Welcome! Did you have a good trip?” or pandering to their every need with a “Why of course!” without some kind of compensation – especially not 24 hours a day, seven days a week! No-one stands by the front door asking people on the street if they'd like a free night’s stay at their hotel simply because they “enjoy being a host.” While it's true that friendliness and politeness are part and parcel of the service, they are ultimately a means to an end, that end being to accumulate varying amounts of money. “We are ladies and gentlemen serving ladies and gentlemen” – the Ritz-Carlton credo may well be a welcome source of motivation for any trainee in this five-star luxury hotel. However, it doesn’t seem quite so relevant to night shift employees at a budget airport hotel. There, it is more a question of “we are businessmen and women offering a service in return for money.”
Once you have admitted to yourself that you are running a hotel purely for the filthy lucre, doing business suddenly becomes a whole lot easier. Only then can you open yourself up to a healthy dose of capitalism; only then can you admit that the objective of a commercial undertaking is to strive for profit, and that maximising that profit is the primary duty of any manager.
Admittedly, happy guests make this job easier, which is why we aspire to make them so. But ultimately, guests can only expect their requests to be met if they are prepared to pay for the privilege. This is where revenue management comes in: I repeatedly see how hotel teams brand their revenue manager as a cold calculator, with the sole objective of maximising profit. However, revenue managers are neither bad people nor technocratic maths nerds. But who would actually take responsibility for this task, if not revenue managers?
If a hotel were an orchestra, the revenue manager would not be playing first violin, there to enrapture the audience. They are more like the timpani, setting the beat in the background: all the other instruments follow their lead, but the real essence of the piece is in the melody. Ergo: what is true of an ensemble performance is also true of the service industry.
A good revenue manager must be an objective judge, able to take decisions and act on the basis of facts. Like a surgeon, when it comes to essential decisions they have to set their emotions aside and apply their craft with precision. Calm during hectic periods, and dynamic during quiet periods. They take an economist’s perspective, a capitalist's viewpoint.
Regrettably, many teams don't yet play the timpani that is revenue management all that professionally. Many hoteliers do not have their eye on the monetary ball, and this urgently needs to change. There is a good reason why hotel chains shell out for the ‘luxury’ of having such a specialist. They value and benefit from their clear and reliable profit orientation. In this regard, private hotels have some catching up to do. That doesn't mean that every hotel should have its own full-time revenue manager, but it does mean that we desperately need to learn how to master this discipline as professionally as hospitality itself.