Hospitality should exist between revenue and sales

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Although alignment between the commercial departments of hotels should be a given, this is not always the case, particularly in regard to the revenue and the sales and marketing departments. In fact, it can appear as though these two departments are completely at odds with one another in terms of both their approach and their outcomes.

Think about it: the revenue department is focused on bringing money into the business, developing plans and approaches that will increase the hotel’s revenue – such as special deals during low season – and ultimately is all about making the business that much more profitable.

On the other hand, sales and marketing tr.end to be more closely focused on the well-being of the customer and on ensuring that said customer gets the best offers, the most cost-effective deals and the kind of service that keeps them coming back.

The breakdown between these two areas occurs because essentially, Sales is all about the relationship with the customer and ensuring they are kept happy through good service and cost-effective offers. You could say their focus is on providing the customer with the best possible deal, rather than focusing on what is best for the hotel.

The disconnect is heightened by the rise of new booking channels online and across social media platforms. Ultimately, the responsibility for these channels sits with revenue management, which splits booking sales into traditional and online. The challenge here is that a lot of corporate accounts utilise online booking platforms, which creates a scenario where – although Sales is tasked with looking after these accounts – a large percentage of the bookings actually go through a channel they are not responsible for.

Furthermore, revenue is tasked with stimulating demand in quiet periods via reduced prices, while optimising revenue in times of high demand. However, the combination of this supply and demand model and the traditional pricing model creates conflict. This is why it is so important to have these departments properly aligned, as it is vital to ensure integrity in your pricing structure, while at the same time avoiding harming the traditional model by constantly undercutting its pricing.

The lack of alignment between the two is made more stark by the understanding that revenue management is a fairly new age concept, whereas sales is much more traditional. However, a successful hotel will focus closely on reducing the levels of conflict between the two, because they should be aware that whatever their differences, a balance must be found: there is, after all, still is a relationship to be upheld with the customer, while revenue remains equally critical.

So how should they go about creating better alignment?

To begin with, these departments need to be made to understand that there is level of give and take – good team players need to understand that there can be no ‘my way or the highway’ approach. Instead, there will be times when the client prevails and others when the business must prevail.

The key to success lies in educating employees in each department to see the other side’s point of view. If they can put themselves in their rival’s shoes, it becomes much easier to foster greater levels of co-operation and to ensure the right business decision is taken every time.

A good way to undertake such education is via workshops where both departments are brought in and then asked to make an argument in favour of the opposite department. If you can get sales to put forward critical arguments in support of revenue – and vice versa – you should be able to obtain much clearer alignment between the two.

The tangible benefits are obvious: all parties should have the same ultimate interest at heart and should be geared towards chasing the same end result, which is creating a natural balance between strong customer relations and increased revenue – one where revenue can be improved without having a potentially negative impact on customer service.