By Tammy Farley, co-founder and president of Rainmaker and a member of HSMAI’s Revenue Optimization Advisory Board
It’s budget season for the hospitality industry, including members of HSMAI’s Revenue Optimization Advisory Board (ROAB), who on a recent call discussed their planning process for 2020. Members had varying ideas for what the upcoming year will look like and how best to confront potential issues. “We see this next year being markedly different than 2019,” one ROAB member said. “No matter what region we’re looking at globally, there are concerns for different reasons that are intertwined.”
Here are three takeaways from our conversation:
1. Goal setting: One challenge that came up was setting realistic goals versus being aggressive and trying to exceed the previous year’s numbers. “Do you set aggressive targets, RevPAR targets, knowing that incentives are tied to those to motivate and push for performance,” an ROAB member asked, “or do you set realistic targets knowing that the hotel teams are going to have to manage expenses?”
“We have modest a modest expectation for 2020,” one member replied. Another member said her organization was also taking a conservative approach to growth and focusing on “tightening the belt from an expense and market standpoint.”
2. Employee retention: But other members are taking a more assertive approach on some fronts. “We’re taking a really pretty aggressive approach on what we can do [in regard to] employee retention,” an ROAB member said, “and around making sure that we’re delivering with our employees, who then create the experience.”
Another member also put the focus on retaining good employees. “We’re still looking to make sure that we’re budgeted properly,” the member said, “and we have the people to think of the new, the next idea, rather than just kind of being conservative and going with the flow.”
3. Digital integration: When HSMAI’s Marketing Advisory Board discussed a similar topic earlier this month, one possibility that was brought up as positive was departmental silos breaking down, forcing digital marketing and revenue management together if budgets were cut. ROAB members disagreed that this be a positive outcome.
“I hope things aren’t perceived as being so tight that either digital marketing or revenue management loses resources and duties start getting combined,” one member said. “I think that would be a net negative for both disciplines if that happens.”
Another ROAB member said that digital is always an area that needs to be invested in, but currently the focus is on straight performance rather than expansion. Another member said that they are investing more resources into their digital effort to hopefully bring up web traffic and make up for any potential shortfall.