The Revenue Executive Roundtable took place at The Ritz Carlton Dubai International Financial Centre on the 16th of May 2024.
Quick recap
The Executive Roundtable kicked off with the introduction of new team members and shed light on a comprehensive discussion on various topics including the role of AI in revenue management, and the impact of geopolitical events on the business. The group addressed the challenges of brand contribution, rate leakage, and the need for a better training pipeline in sales and management roles. Additionally, they emphasized the crucial function of revenue managers in driving profitability and the importance of process improvement, talent retention, and skill development within the revenue management function.
Summary
- Discussion on AI, Sales, and Revenue Management
The executives zoomed in to a discussion covering a wide range of topics. The group discussed the certification program for revenue leadership, the growth of the executive round table, and the use of AI and technology in the hospitality industry. In a poll, the majority were keen to leverage AI and tech developments, whereas some of the other participants were excited but unsure how to go about it.
The conversation ended with a discussion on the role of AI in revenue management, pricing optimization, and the importance of long-term visioning and setting company goals. While AI assists in simplifying reservations and operational processes, the role of Revenue professionals will continue to exist. Whilst some executives shared that the potential of AI isn’t fully known yet, are the revenue teams ready to hand the processes over to AI yet, and to what extent should they be handed over? AI adds value to the conversation, such as booking notifications, or traveler recommendations, or judging sentimental conversations in the booking process. From the inspiration to the planning phase, tools like justasklayla.com can revolutionize the booking journey. In another poll, most revenue professionals said it was the respective department’s role to champion AI and technology developments within the organization. However, a few believed it should be the technology department’s initiative.
- Strategies for Regional Changes and Geopolitical Impact
Executives discussed the importance of their company’s strategies in response to regional changes and the impact of geopolitical events on the business. They highlighted the prominence of considering alternative market strategies, especially in the face of uncertain geopolitical situations. They shared the impact of events like Ramadan on the business, noting that while there was a decline in certain segments, other areas, like luxury and upper-luxury hotels, were less affected. Finally, they touched on the potential for future growth in the region, particularly in the meetings, incentives, conferences, and exhibitions (MICE) sector.
- Addressing Leakages and Enhancing Revenue Management
The group discussed the challenges of brand contribution and value proposition leakages in the industry. They expressed the need for consolidation and a better understanding of the market, platform, and end users. Executives highlighted the shift towards static contracts in the hotel industry and how their hotels conducted pilot projects to reduce rate gaps to minimize leakages. They emphasized the importance of addressing rate leakage issues to maintain profitability. Discussions on the complexities of distribution, online agent behaviors, and the goal of compliance were touched upon. They acknowledged the difficulties in addressing poor performer behaviors while maintaining business.
The role of technology and the need for connectivity models with partners to facilitate direct bookings, while recognizing customer preferences for trusted travel agents was important. The impact of technology on the hospitality industry and the importance of investing in it to remain competitive were key factors. Pricing strategies in the airline and hotel industries, highlighting the challenges of dynamic pricing and markup policies were also discussed. This is a topic discussed every year at the Commercial Strategy Conference and will be this year too. The group wanted a tool for understanding city demand and invited feedback on methods for staying informed. During the poll, an equal number of participants (35% each) believed that the biggest challenge to their organization was either mid/long-term destination strategies (incl. GOBs, value propositions, demand generation, or rate leakage. 29% felt short-term response to factors such as demand fluctuations, regional volatility, and travel restrictions).
- Addressing Talent Pipeline and Revenue Management Challenges
Challenges and progression within the company were discussed, with a particular focus on sales and management roles. They highlighted the need for a better training pipeline, adequate funding for training, and the increasing complexity of working manager requirements. They also posited the company’s efforts to reconnect the talent pipeline and the challenges in talent acquisition in revenue management. A need for positive PR needs to be induced.
Lastly, they touched on the career progression for revenue managers, the importance of engaging and training employees, and how internal teams can create pilot programs aimed at training aspiring revenue managers. In a poll, 53% of attendees believed they had access to industry trends and insights but needed a better approach to understanding the data. 35% thought there was too much information and were unsure of how to keep up. However, 11% believed they had the right amount of information and a structured process to obtain it. The main reason 59% struggled with talent acquisition is an uncompetitive package, whereas some believed the recruitment process was broken and others felt more PR needed to be done for the promotion of Revenue Management jobs.
The struggle with talent retention was that 80% believed that there weren’t enough career progression opportunities for revenue managers. The other 20% said that the compensation wasn’t attractive enough to keep them and so they lost good talent to competition.
- Revenue Management Role and Responsibilities
The executives spoke about the role and responsibilities of revenue managers, emphasizing their crucial function in driving profitability and understanding the impact of their actions on various departments. They stressed the importance of revenue managers having a thorough understanding of P&L analysis and using ratio analysis to optimize expenses and revenues. They highlighted the need for revenue managers to be accountable for setting KPIs and to be developed into profit managers or asset managers. Lastly, the importance of revenue growth, the need for process improvement, talent retention, and the development of skills within the revenue management function were reasoned.
Next Steps
- The static-dynamic conversation will be further discussed by a panel of experts at the Commercial Strategy Conference in November.
- The dialogue on talent acquisition and retention is also one that will be broadly discussed at the Commercial Strategy Conference.
Conclusion
- The role of the revenue management function will always be in demand, and internal teams will promote that using positive PR.
- The mentorship program was introduced by the HSMAI ME Revenue Advisory Board where the committee members give back to the community by mentoring young talent in the region and helping them grow and shape them to be the next commercial leaders in Revenue.
- The Certification in Revenue Management (CRME) would help professionals be competent at developing an infrastructure to support revenue management within the framework of their organization and be able to maximize revenue opportunities and optimize profits.
