Assessing the State of Revenue Management: Insights from the 2023 Global Survey

As hotel businesses strive to optimize their earnings in this inflationary period and stay ahead of the competition, the role of Revenue Management (RM) Professionals has never been more crucial. The 2023 Global RM Survey was conceived with a bold mission - to illuminate the path towards a more prosperous future and elevate the discipline globally. Armed with a burning curiosity, this global-first RM leadership survey sought to answer four lingering pivotal questions:

1. How is Technology Shaping Revenue Management? Among the key concerns, we delved into the very heart of modern RM, seeking to discover whether the surge of Artificial Intelligence and RM technology has amplified the efficiency of the professionals behind the scenes.

2. Where is Revenue Management Positioned in Hotel Organizational Charts? Our survey investigated the exact place RM occupies within these bustling establishments. With organizational dynamics shifting, this probing inquiry aimed to map the trajectory of the field's influence.

3. How are Leadership and Soft Skills Perceived by Revenue Management Professionals? In the high-stakes world of RM, leadership, and soft skills have emerged as indispensable attributes. Our survey ventured into the minds of professionals to gain an understanding of how they perceive their own capabilities in this domain.

4. What do RM Professionals See for the Future of Leadership and Soft Skills? The visionaries among RM professionals are often the architects of progress in the hotel industry. By tapping into their insights, we sought to unveil the significance they attach to leadership and soft skills, envisioning the roadmap that lies ahead. This was the most fascinating part of the survey and revealed the most intriguing insights.

From the corridors of renowned hotels to the bustling offices of hotel industry leaders, our survey penetrated the very pulse of Revenue Management. The findings offer an intriguing insight into the current mindset and highlight areas of opportunity so that we can pave the way for a future that brims with promise and potential. A future that has more RM backgrounds occupying key seats at the boardroom table constructing the future of hospitality.

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Results of The Global Leadership Survey:

After 1,147 Revenue Management professionals around the world took part in the first-ever Global Revenue Management Leadership Survey, Elite Revenue Management, in conjunction with the Grind Leadership Academy, is pleased to share the insights uncovered. Join us to delve into the findings and discover the key learnings uncovered.

A Diverse Demographics of Respondents:

Let us begin by understanding the diverse demographics and geography of respondents to the Global Revenue Management Leadership Survey made up, mainly, of Multi-site RMs and Strategic RM professionals (85% of respondents). A further 13% manage a single-site hotel effectively measuring the temperature from the coalface of RM.

Intriguingly, a significant 57% of participants revealed that they have occupied their current role for less than 3 years, underscoring the ever-evolving nature of RM on a global scale.

Spanning continents and cultures, nearly 58% of the surveys emanated from the regions of Europe, Great Britain, and North America. A further 42% from Asia Pacific, South America, the Middle East, and Africa offer an unbiased and representative volume from diverse corners of the globe. The range of experience among our esteemed participants varied from 1 year to an impressive 36 years, converging at an average of 7.6 years of rich and diverse experience.

Q1. Revolutionizing Efficiency: How Technology Shapes Revenue Management:

With so much hype around Artificial Intelligence and advancing Revenue Management systems, the survey set out to discover if technology is making a difference in the lives of the very practitioners who steer the course of hotel Revenue Management. With a generous dose of curiosity and anticipation, we were pleased to learn that RM technology has, overwhelmingly, been perceived to have improved in the last 12 months gathering 85% in favor (64% strongly agree & 21% somewhat agree). The results serve as a compelling testament to the positive strides being taken by Revenue Management System (RMS) providers, propelling our field forward with unwavering momentum. Respondents praised the benefits of enhanced integration, advanced machine learning algorithms, and analytical prowess, all working in harmony to bolster daily operations.

However, the outlook on technology, in general, revealed a nuanced landscape, with only 57% of respondents expressing a belief in its overall effectiveness. A considerable 23% remained neutral, while an unexpected 20% reported a perception of technology's diminished efficacy over the past year. This question encompassed the combined advancements in Artificial Intelligence (AI), Generative Artificial Intelligence (GAI), and RM Technology, adding intrigue to the forthcoming results of the AI and GAI survey questions, which we will delve into in a subsequent section.

The significance of technology training emerged as a noteworthy aspect, as an encouraging 57% of respondents reported having received some form of technology training in the last 12 months. The journey, however, takes an intriguing turn when we juxtapose technology's hard-skill training with that of soft-skill and leadership training, a revelation we will explore in greater detail in later sections of this report.

Unveiling the Ambivalence: Optimism and Uncertainty Surround AI and GAI.

A compelling 79% of respondents resoundingly express their excitement about the prospects of AI and GAI for RM, fostering a palpable sense of positive anticipation for the future. Moreover, an impressive 68% of participants firmly believe that AI and GAI will play a pivotal role in shaping the future of RM, further fueling the prevailing optimism.

However, the newfound enthusiasm is counterbalanced by a conspicuous lack of clarity and concrete planning for the integration of these cutting-edge technologies. Despite the promise of innovative AI and GAI products like Bard, ChatGPT, Midjourney, and an array of browser extensions, they have not yet found their definitive place in the daily practices of RM professionals. A significant 38% of respondents adopted a neutral stance on implementing such technologies, while an additional 20% somewhat or strongly disagreed with any practical plans within the next 12 months. The amalgamation of high optimism with a substantial level of neutrality underscores a prevailing sense of uncertainty regarding the optimal strategies for seamless implementation.

Q2. Where is Revenue Management Positioned in Hotel Organizational Charts?

The pinnacle of hotel performance thrives on the synergy between four critical corners: Sales, Marketing, Operations, and Revenue Management, where a harmonious blend of collaboration fuels exceptional results. Our Global Revenue Management Leadership Survey sought to address a fundamental question - where does Revenue Management stand within the organizational chart of today?

Let's delve into the close-knit relationship between Revenue Management and Marketing, particularly in the realm of digital marketing, where a majority 59% of respondents reported an equal standing. This trend remained consistent across continents. However, intriguingly, for single-site hotel responsibilities, 51% (76 RM professionals) positioned Revenue Management above Marketing. Further exploration uncovered that seniority to Marketing was more prevalent among those with 15 or more years of experience, suggesting that individual profiles and expertise play a vital role in the positioning.

It is widely acknowledged that Operations historically held the reins of commercial functions. The advent of Revenue Management in the past two decades has heralded a transformative shift, elevating the commercial team while not diminishing the importance of Operations. In this context, 49% of respondents reported an equal status to Operations, while a significant 43% claimed an elevated organizational position. For the Marvel fans out there, the advice for Peter Parker rings true "With great power comes great responsibility". Today's Revenue Management professionals bear the weight of great responsibility, expected to deliver consistent peak performance, achieve budgeted expectations, and return owners' capital investments. The role today requires an extraordinary blend of hard and soft skills to successfully satisfy those enormous responsibilities.

The final piece of the puzzle lies in Sales, where a staggering 81% of respondents reported an equal status. This finding challenged our preconceived belief at Elite Revenue Management, rebutting the notion that RM has assumed seniority over Sales in the organizational chart. Nevertheless, success lies in effective collaboration amidst occasional conflicting circumstances. Comments from respondents echoed the presence of tension with differing objectives, underscoring its universality across the globe.

As we navigate the intricacies of positioning Revenue Management, it is evident that the key lies in fostering collaboration, respectful tension, and fluid communication between these essential pillars of the hotel industry. The quadrant of excellence thrives on the dynamic interplay between Sales, Marketing, Operations, and RM, unlocking a realm of limitless possibilities for hotel performance irrespective of any theoretical organizational chart.

Q3. How are Leadership and Soft Skills Perceived by RM Professionals?

Critical to note that the leadership assessment was effectively a self-diagnosis meaning no outside perspective of RM was gathered. Below are the key outcomes of the soft skill assessments with other departments:

1. The average effectiveness rating for collaboration between the respondent and the sales team in their organization is about 7.62 on a scale of 1 to 10. This suggests a generally good level of collaboration.

2. The average effectiveness rating for collaboration with the marketing team is slightly lower, at about 7.09. This indicates room for improvement, especially for the 24.4% of respondents who offered a collaboration score of 5 or less with Marketing.

3. The average effectiveness rating for collaboration with the operations team is about 7.36, also indicating room for improvement.

4. Respondents generally rate their level of decisiveness highly, with an average score of about 8.06. This suggests that respondents generally feel decisive in their roles.

5. The outcomes of respondents' decisions at work are also rated highly, with an average score of about 8.02.

6. Respondents have a high level of confidence in their communication with colleagues, with an average score of about 8.23.

7. The impact of respondents' communication at work is also rated highly, with an average score of about 8.11.

8. The freedom to express commercial creativity is rated fairly high, with an average score of about 7.70, however, 17.8% of respondents ranked their freedom to express commercial creativity 5 or below indicating some pockets of restriction.

9. The impact of respondents' commercial creativity has an average score of about 7.66, also indicating room for improvement. Only 10.2% ranked the impact of their commercial creativity below 5 suggesting when RM professionals are given the freedom to express, they are confident of delivering results.

Next, we created a correlation matrix to understand the relationships between these numerical variables:

The heatmap above shows the correlations between the numerical variables in the survey data. The scale on the right side of the heatmap represents the correlation coefficient, which ranges from -1 to 1. A value close to 1 indicates a strong positive correlation, a value close to -1 indicates a strong negative correlation and a value close to 0 indicates a weak or no correlation.

Here are some key observations:

1. There is a strong positive correlation (0.61) between the "confidence in communication with colleagues" and the "impact of communication at work". This suggests that individuals who are confident in their communication skills perceive their communication to have a significant impact at work.

2. There is a moderate positive correlation (0.5) between the "level of decisiveness" and the "outcomes of decisions at work". This could indicate that individuals who rate themselves as being decisive also tend to rate the outcomes of their decisions favorably.

3. There is a moderate positive correlation (0.49) between the "freedom to express commercial creativity" and the "impact of commercial creativity". This could suggest that individuals who feel they have more freedom to be creative also perceive their creativity to have a greater impact.

These correlations suggest that confidence in one's skills and the freedom to express creativity are important factors in perceived effectiveness and impact at work for RM professionals.

Finally, we were encouraged that 62% of respondents reported a high influence on the commercial direction. A further 21% reported full control while 13% reported medium control. Whatever the control dynamic and nuance of a hotel or group of hotels, it is apparent that RM professionals carry significant weight in the commercial decision-making process and command respect within the industry. Having been in RM since the early 2000s, this was not always the case and how this evolves will be fascinating to observe.

Q4. What do RM Professionals See for the Future of Leadership and Soft Skills?

As leaders, the goal is to build a foundation of confidence that RM Professionals can launch their commercial creativity effectively and impactfully. This section, the most fascinating and revealing, explores the landscape of personal development for RM professionals and how seriously RM leaders are considering leadership and soft skills within the discipline.

First and foremost, our observations were heartening, as an impressive 79% of respondents expressed ambition for career progression. The seeds of aspiration are firmly sown, with 22% envisioning a journey towards occupying a C-Suite role, while a further 8% dream of ultimately seizing the coveted CEO seat - a quest I, myself, fought ardently to achieve.

Unveiling the Achilles' Heel: The Lamentable Lack of Succession Planning:

Amidst the fervent desire to progress and the inspiring ambition that resonates among respondents, a disconcerting void of planning becomes evident. Shockingly, a staggering 62% of participants revealed that they have no succession plan in place to realize their lofty ambitions, with a mere 11% fortunate enough to possess a formal, recognized plan.

To compound the issue, the absence of planning extends to even more critical aspects of individual growth. Disturbingly, 60% of respondents disclosed that they have no strategy in place for someone to seamlessly transition into their own role when they depart. This glaring oversight leaves aspiring professionals in a vulnerable position, hindering the potential for personal and organizational advancement.

Bridging the Chasm: The Urgent Need for Leadership and Soft Skill Development in RM:

As the perceptions of RM Technology surged forward, respondents unequivocally acknowledged the mounting value of human-centric/soft skills within their organizations. An overwhelming 89% either strongly agreed or somewhat agreed, with only 9% expressing dissent and a mere 2% remaining neutral on the matter.

Despite this resounding recognition of the significance of leadership and soft skills, our astonishment grew when we unearthed a disheartening statistic - a mere 24% of respondents reported having undergone any formal leadership training in the last 12 months. In an industry that is entirely performance-driven and metric-measured, 76% of respondents were not exposed to leadership or high-performance training. This glaring disparity highlights a substantial gap - a chasm - between the present reality and the luminous future we envision.

Leadership and soft skills serve as bedrock foundations for the advancement of corporate performance and personal growth, fostering pathways to optimal revenue results and promotion. The inaugural Global Revenue Management Leadership Survey presents a profound insight, urging us to bridge this gap in the forthcoming year.

At Elite Revenue Management, we were encouraged by the findings of the survey, especially that technology is improving the daily lives of RM professionals. Our unwavering ambition and mission lie in nurturing the growth of RM professionals, empowering them to perform at an elite level, and edge towards claiming the coveted C-Suite roles they deserve should they desire.

We wish to thank all those that took part in the 2023 Global RM Leadership Survey and look forward to observing the evolution over the next 12 months.

About the author: Rob Paterson was a 15-year veteran of Revenue Management before entering the C-Suite and eventually being named CEO of Best Western Hotels Great Britain in 2018, a role he occupied for almost 4 years. He now resides in the US and is the founder of the Grind Leadership Academy and Elite Revenue Management Community. To learn more about how Grind Leadership Academy can help elevate yours' and your company's performance, check out the services page and schedule a call or join one of the performance ally coaching programs listed at the bottom of the page.

The Elite Revenue Management Group

The Elite Revenue Management Group is a community for modern RM professional to hone their soft skills. The group is administered under the Grind Leadership Academy offering free live tutorials, networking opportunities, tailored and specialized coaching programs, and career advancement. Elite Revenue Management is accepting new members from RM professionals now.