How to Build an Effective Commercial Hotel Organization in 2024

A hotel’s commercial team—revenue management, sales, and marketing—is critically important to the financial health of a property. When working harmoniously, these functions combine to ensure a property is filled with high-value guests while minimizing acquisition costs as much as possible. However, “harmonious” is an unlikely descriptor for many hotel commercial teams.

3 Ways to Build an Effective Commercial Hotel Organization in 2024

Revenue management and sales professionals often find themselves at odds over whether to accept group business that overlaps with high-demand, yieldable periods—and often need a general manager or owner to step in to break the impasse.

Fortunately, the path to a more harmonious and connected commercial organization is not out of reach. While this may not all be achievable overnight, there are some key steps you can take to get all members of your hotel’s commercial org working cohesively. Below, you will find three ways to build an effective, connected commercial organization.

1. Evaluate Current Organizational Structure and Goals

At the root of a disjointed commercial organization is often one or two things: an organizational structure with an unclear hierarchy for ideal revenue-focused decision making, or goals and incentives that don’t always factor in the bigger picture.

A great starting point for building a connected commercial organization is to first take a close look at how well the structure of your team is positioned for revenue maximization efforts. Ultimately, the goal of your commercial organization is to grow revenue. In a vacuum, a sales team measured and incentivized by their ability to bring in new business may seem to align with this revenue growth goal. Still, experienced revenue managers understand that sometimes, the seemingly great bit of proposed group business coming from a sales team can hurt the property’s ability to maximize revenue.

Instead of building commercial teams with segmented—and at times potentially conflicting—goals, it’s best to have a goal structure that focuses on overall revenue performance measurements rather than the individual components like raw sales revenue targets. When all elements of a commercial team are aligned with a cohesive goal, the previously tough negotiations between sales and revenue management become substantially easier to navigate.

One suggested organizational structure change to facilitate this is including a “director of commercial” role in the hierarchy. This role would report to the GM/Owner, and have sales, revenue management, and marketing leaders reporting to them. The person in this role should have a strong grasp of revenue management and sales practices to guide high-level strategies for all functions.

2. Ensure the Technology Stack and Data are up to Par

Effective revenue management decision-making depends on having a solid foundation of accurate data and well-integrated systems. Hotels with a well-integrated revenue management system (RMS), property management system (PMS), central reservation system (CRS), and customer relationship management system (CRM) have a competitive advantage as they have greater visibility into the property’s true performance—in turn making it easier to make more effective commercial decisions.

When all commercial team members operate with the same set of clean, reliable business data, it helps cut down on missed opportunities or miscommunications.

3. Work to Establish a Revenue Management Culture

While commercial teams of all structures and sophistication understand that their goal is to grow the hotel business, the revenue maximization efforts of a revenue manager aren’t always intuitive. A conscious effort should be made to educate commercial teams about situational revenue management best practices and the considerations that are made when evaluating potential group business. When sales teams understand the “Why?” behind a shift in revenue management approach, strategic changes are much easier to evaluate and communicate.

While establishing a revenue management culture, hoteliers should also seek ways to highlight and celebrate revenue management wins across departments. This can be achieved partly through regular tracking and sharing of results for key revenue management KPIs like RevPAR.

The goal is to have a team that’s bought in and committed to doing what’s necessary to maximize revenue. How to best cheerlead, hype up, prod, or incentivize your organization toward achieving this goal will depend on the team you’re working with. No matter how you go about it, a conscious effort needs to be made.

Taking a fresh look at your hotel’s commercial organization and how well it works together is an ambitious undertaking. Still, it’s a worthy exercise for any hotelier looking to make the most of the new year and beyond.

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