The role of a revenue manager is one of the most important within hotels and similar organizations, assisting the business by optimizing financial performance. However, many people remain unclear about exactly what a revenue manager is, what tasks are connected to the job, the level of education required, and the salary. In this article, you can learn more about these aspects and build a much clearer picture of what ‘revenue manager’ really means.

Table of Contents:

What is Revenue Management?

As a discipline, revenue management uses data and other information to forecast future demand levels and optimize pricing, distribution, and associated strategies. Essentially, the job of a revenue manager is to use data and forecasting to optimize a company’s financial results.

You can explore this topic in greater detail, access a working definition of precisely what revenue management is, learn about the value of forecasting, discover the main key performance indicators to track, and a whole lot more by taking a look at the “Revenue Management: The Basics of Revenue Management Explained” article.

What is a Revenue Manager?

A revenue manager is tasked with keeping up with market trends, analyzing data, and using the available information to anticipate demand and adjust strategies accordingly. Ultimately, the core objective for any revenue manager is to maximize the amount of money generated by selling products or services.

Achieving this will require the right decisions in terms of pricing, marketing, and the distribution channels used. Revenue managers are also responsible for providing information to key departments within a hotel or similar business so that they can make evidence-based decisions and achieve better outcomes.

What Are the Tasks of a Revenue Manager?

A revenue manager’s key tasks include carrying out long-term forecasting of demand levels and analyzing the information to identify trends. This then makes it easier to anticipate recurring events and allows those in hotel management to understand when spikes or dips in demand are likely to occur and why that may happen.

Beyond this, a revenue manager will usually be tasked with continually monitoring the performance of distribution channels, including direct bookings, global distribution systems, online travel agencies, and hotel metasearch engines, to determine which are performing best and their return on investment.

As a revenue management strategy progresses, it may be necessary for a revenue manager to adjust the distribution channels being used, to achieve peak financial performance. A revenue manager may also keep information up-to-date across each channel.

Revenue managers are crucial in facilitating department collaboration by providing an overarching strategy to unite them. A typical hotel revenue manager job description often references a need to identify alternate revenue sources or new opportunities to improve financial outcomes.

Finally, report writing is one of the main tasks associated with revenue management. An individual in this role must be comfortable creating reports and presenting them to senior figures in an organization.

What Skills Should a Revenue Manager Have?

In terms of core skills, a revenue manager must be competent in interpreting data and conducting statistical analysis. Organizational skills are a must, while written and verbal communication needs to be of a high level, too, as a revenue manager needs to be able to report to senior leaders and speak to peers.

The role of revenue manager can be demanding, so a strong work ethic is essential. To be an effective revenue manager, you should also be able to work as part of a team, and you will need a decent level of IT competency, including experience working with core software packages like Microsoft Word, Excel, and PowerPoint.

What Level of Education Does a Revenue Manager Need?

Generally speaking, someone applying for an entry-level revenue manager role in the hotel industry will be expected to have a bachelor’s degree in a relevant subject, with examples including hotel management, business management, accounting, economics, or any subject with a particularly strong focus on data analytics.

Substantial experience working within a hotel environment will usually be required, and it would be advantageous if this experience were related to areas like pricing, distribution, marketing, or sales. A prior history of working with global distribution, property, and revenue management systems may also be needed.

To Whom Does a Revenue Manager Report?

The exact place a revenue manager sits within a hotel’s hierarchy will largely depend on the size of the hotel and whether it is part of a chain. Within smaller and mid-sized hotels, it is common for a revenue manager to be responsible for the revenue management of a single hotel and report to that hotel’s general manager.

With mid-sized and larger hotels, there may be a director of revenue management to report to. If you work in a chain, you might be responsible for anywhere from one to five different hotels. If responsibility does extend to multiple hotels, you may need to report to a regional revenue manager instead of a general manager.

What is the Salary of a Revenue Manager?

The precise salary for a revenue manager will depend on a range of factors, including the size of the hotel, the country the hotel is situated in, and the precise responsibilities involved with that specific revenue management job. Additionally, your level of experience before moving into the role can have an influence on the eventual salary too.

Nevertheless, you can gain a sense of the kind of salary you might expect when working as a revenue manager in the hotel industry by visiting: https://www.caterer.com/salary-checker/average-revenue-manager-salary

Revenue Manager vs. Yield Manager

The job of a revenue manager is sometimes confused with a similar position, which is that of a yield manager. While the concepts of revenue management and yield management do share clear similarities, there are also notable differences, and these differences can help to explain how the two roles differ as well.

Essentially, yield management is concerned with maximizing the revenue generated from a perishable inventory. In hotels, this means maximizing revenue through the sale of hotel rooms. This can be achieved through various strategies, including price discrimination, where customers pay different prices for the same product.

This is also true of revenue management, but the overall focus of revenue management is wider. For instance, it considers not only the sale of hotel rooms but also the money that can be generated through food, drinks, and other services. Similarly, revenue management also factors in the cost of distributing rooms.

In this sense, the revenue manager’s role can be viewed as being broader in focus than the role of the yield manager.

Courses for Revenue Managers

A course for revenue managers can provide you with the knowledge and qualifications to land a job and succeed in it. Generally, courses of this kind will teach about different distribution channels, pricing strategies, data interpretation, forecasting, and much more, ensuring you graduate with a rounded education.

Check out “Hotel Revenue Management Courses: Information + List of Educators” to find out a whole lot more about revenue management courses, what they can offer you, a list of organizations and educators that offer these courses, and information on the next steps you should look to take after you have graduated.

Video: Hotel Revenue Management with Scott Dahl

 

Discover the Latest Revenue Management Trends

The field of revenue management is constantly evolving, with new technology changing the way forecasting and distribution channels are handled and new strategies becoming tried, tested, and accepted. For a revenue manager, it is absolutely essential to understand and keep pace with the latest trends.

Read “Revenue Management Trends: Discover the Latest Developments” if you would like to explore some specific examples of current trends and gain further insight into the value of always keeping up with the latest developments.

Revenue Management Strategies Every Revenue Manager Should Know

There are certain strategies that every good revenue manager needs to know, from getting to know the market you are operating in and adopting the right pricing strategies to embracing search engine optimization, identifying different types of customers, and dividing the customer base into segments approaches can be optimized.

You will be able to find out a lot more about the revenue management strategies mentioned while also getting information on some other key strategies that can help to boost financial outcomes and hotel growth, by checking out our previous article on the subject, “9 Revenue Management Strategies to Grow Your Hotel Business”.

8 Revenue Management Tips

Revenue management is a complicated discipline, and it can be useful for any revenue manager to have access to some specific tips. For example, do you know how to create a culture that facilitates revenue management? Have you learned how to make the best use of automation? Do you fully understand how to prioritize direct bookings and why?

Read “8 Revenue Management Tips for Hotels” if you are interested in accessing some pieces of advice that can assist you with getting the most from a revenue management strategy and optimizing financial outcomes.

Total Revenue Management on the Rise

Another key concept that a revenue manager needs to be aware of is total revenue management. This is where revenue management concepts are applied to all possible revenue sources within an organization. In contrast, concepts like up-selling and cross-selling help you bring in as much money as possible.

The “Total Revenue Management: How Hotels Can Maximise Their Revenue,” the article goes into the concept of total revenue management in far more depth, exploring what it is, the main advantages, and tips to implement the strategy.

Revenue Management Blog for Revenue Managers

Revenue management is a complex field requiring a revenue manager to constantly keep up with the latest information, technology, emerging strategies, and more. There may also be times when a change of approach is needed or when the plus points of a particular software solution need to be understood.

Our “Hotel Revenue Management Blog” provides regular blog posts covering all aspects of the revenue management discipline. Whether you are looking for insights into new trends, need information about revenue management courses, or seek useful tips, you can find content that can assist you in your efforts.

The job of a revenue manager is crucial within hotels and similar businesses because these individuals are responsible for overseeing strategies that can maximize earnings and reduce the costs associated with selling hotel rooms and other products or services. The role itself is varied in terms of the required tasks, and industry experience is usually necessary. At the same time, many vacancies will be aimed at those who have also studied a relevant course.

More Tips to Grow Your Business

Revfine.com is a knowledge platform for the hospitality & travel industry. Professionals use our insights, strategies and actionable tips to get inspired, optimise revenue, innovate processes and improve customer experience. You can find all hotel & hospitality tips in the categories Revenue Management, Marketing & Distribution, Hotel Operations, Staffing & Career, Technology and Software.

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This article is written by:

Martijn Barten

Hi, I am Martijn Barten, founder of Revfine.com. With 20 years of experience in the hospitality industry, I specialize in optimizing revenue by combining revenue management with marketing strategies. I have successfully developed, implemented, and managed revenue management and marketing strategies for individual properties and multi-property portfolios.