The relationship between Sales and Revenue Management is complex and requires collaboration and communication. In The Hotel Sales Playbook, the study guide for certification Certified Hotel Sales Leader (CHSL) From HSMAI, we offer a complete manual for Business Leaders to optimize the recipe and drive business success.
The interdependence between Sales and Revenue Management
An effective sales team works together to facilitate idea generation and creativity, responding to opportunities with unique solutions. Members of both areas learn new skills, methods, and knowledge from each other.
A strong sales team, combined with a skilled revenue professional, will feel confident adopting innovative approaches when developing solutions for their clients. Together, they will ask the right questions and be able to constructively discuss negotiations, restrictions, and concessions.
Unfortunately, this relationship between sales and RM doesn't always make it past the initial "forming" phase. It can be marred by poor communication and poor decision-making, often based on feelings rather than facts. The result? Lost sales and revenue.
Today, more and more hotel companies are restructuring their organizations around sales teams, where sales, RM, marketing, and distribution work together to optimize results toward a common goal. Each discipline plays an essential role in revenue generation: sales generates demand and builds relationships, while revenue optimizes, oversees pricing, and manages inventory.
Each area needs to broaden its vision and understand the other's perspective. For example, from a sales perspective, some factors are important when evaluating an opportunity with RM:
- Total customer value: How much do you generate annually?
- The total value of the stay, including additional revenue, catering, hotel consumption, etc. That is, think about the Average Ticket and not just the Average Daily Value.
- The cost and value of building customer relationships.
- The cost or loss of value resulting from the agreed concessions.
At the same time, the revenue professional's vision when evaluating an opportunity together with sales must consider:
- The loss of income and profits caused by inserting the group into a period of high demand.
- The impact on shoulder nights by restricting sales to the individual segment.
- The incremental value based on the average spending of the individual customer.
- Price sensitivity and the group's willingness to pay.
Sales professionals need to recognize the highly situational nature of RM decisions and the impact these decisions have on the business's overall financial results. On the other hand, revenue professionals need to go beyond the "black and white" of analysis and consider the "gray area": the intangible aspects of total long-term value.
HSMAI members who earn CHSL certification gain professional recognition, career growth opportunities, and an increased ability to contribute to the success of their organizations.
To learn about the glossary of the study's content: https://academy.hsmai.org/wp-content/uploads/sites/11/2024/10/chsl-toc.pdf
For more information about certification Certified Hotel Sales Leader (CHSL) and the Study Guide offered to those who register: https://academy.hsmai.org/certification-hotel-sales-leader/