22 Sep Sales and Revenue vs. Operations – The ongoing battle!
So, in my last post I talked about overbooking, and in a few previous rants I have touched on the difference between operations and revenue teams in hotels. I have decided to consolidate my arguments for this in to one single post to hopefully get a clear contrast between the two put in to words.
I have plenty of experience at the hands of various different types of manager, in many different hotels; this is probably the same for many people reading this blog! I have seen the difference between revenue and operations, and have also been the person in the middle. As a Front of House Manager, it is often me that has had to somehow bridge the gap between the two, sometimes this is minimal, sometimes it is like building a bridge to the moon!
There are two sides to every story, and there are struggles within revenue – particularly when you have a head office demanding you squeeze every penny out of the guests or conference delegates! But the actual situation ‘on the floor’ is often somewhat different. Let me put it this way – an effective hotel manager actually walks the floor, gets involved with staff and guests, and is operationally minded to overcome those last-minute hitches. An effective manager therefore, is not tied to a desk running through figures, and does not place pressure on to people who do not control the situation!
Take for example the following:
[quote]General Manager is pressurised by Head Office revenue team and their managers. This is passed on to other team managers. These team managers then inadvertently pass this on to their staff, because the manager gets bollocked if there is revenue discrepancies from their department, they then bollock the staff for getting it wrong. The staff then get pressurised, start getting stressed, start having a go at other team members for doing things wrong, and before you know it, you have a full-on revolution and mutiny on your hands![/quote]
Yes! I speak from experience. I have been that team manager and that staff member! And let me tell you, it is not a nice place to be! As a team member, you feel like you can do nothing right, you feel overworked, you feel under so much stress that you take it out on guests without realising, because you do not provide the usual level of service you normally would. When a guest complains on one occasion about you, you throw in the towel and walk out! It happens every day in hotels across the world – and I have done this myself too! As the team manager, you absorb a lot of the pressure from above, but when your staff make a mistake, you unleash hell – disciplinaries get threatened and people start getting one-to-one meetings over performance. Team members state they are unhappy and you have to tell them that there is nothing you can do, or even worse, that they are the ones creating the issues for you in the first place.
The vicious cycle has been started, and continues until the tenth of never! Stuck in the middle is the Head of Department – the very person you need to concentrate on getting the guest service right! Instead, they end up stuck behind a desk staring at spreadsheet after spreadsheet and report after report – and in the meantime their entire department is falling apart!
The important thing to take note of here is how revenue can affect your staff in an extraordinarily detrimental way. You can create a culture of hatred for the job, and lose some extremely good people through pressurising over revenue. I have been told in the past to ring other hotels and see if they need rooms – fair enough, I understand that this can be beneficial (not very often in my experience, but still worth a shot!), and have no issue doing this – what I have an issue with is when I get asked 15 minutes later if any other hotel has taken a room off us yet – often I have not even had a chance to go to a phone, let alone get the number and call it and have a conversation with someone. This then changes the priority of my tasks, suddenly the most important thing to do is ring round hotels; the guest waiting for an extra bed or more towels will have to carry on waiting! As a team member, I would have to put aside the other jobs I am doing to check reservations and help protect incorrect revenue postings, but instead the phone takes precedence.
Telling me to sell the rooms and get people drinking in the bar is pointless – I cannot be expected to drag people in kicking and screaming or reducing everything to half price just to try and get a few pence more – these things do not work and can alienate customers and cheapen your brand overall, plus put your staff in to impossible situations – a matter of doing something to achieve nothing – the following day does not get a ‘thank you’ for achieving 100% occupancy, it just gets a ‘ring round and sell the last 20 rooms for tonight’ as soon as I walk through the door.
This is the difference and battle between revenue and operations – to protect revenue takes time, and to be pressured in the ‘now’ about revenue, takes away from being able to be proactive and prevent revenue incorrectly being charged! Again, another cycle is created – revenue cannot be protected because revenue is being pressured within teams and departments to be the ‘here and now’ priority; this takes away the time that would be used to stop revenue issues in future through thorough and correct administration.
Not yet convinced that a disparency exists? Okay – take for example the party that gets booked. Sales and revenue (usually pretty much one and the same) book the party for the evening in the bar area. There are 4 tables to set up and the guest is bringing their own food. The total cost of the booking amounts to discounted room hire and a bit of money for salads and nibbles. Now look at what is needed operationally: Extra staff, not only during the party but also for before and after; additional resources for set-up such as staff and tables; additional linen and napkins; potentially additional kitchen staff; possibly security staff. But none of these were even thought of when the booking was taken. The additional main operations issue is that you have one bar closed to the public/hotel guests and this could cause complaints, especially if you only have the one bar! It is fair enough to provide a no-tray-charge service to the rooms for guests, but in all honesty, does any guest really want to spend the evening sat in their room? Not only this, but you could get multiple complaints from people who wanted to use the bar but were unable to! Potentially you have lost revenue unless that party is a really good spend for the evening – ultimately a better option operationally would have been a conference room for the event and a private bar or similar. Staff get pressured by being overworked by a poorly executed sales operation, last minute staffing changes may have to take place and the whole set-up takes away from a manager being able to compete that order, or run that audit, or double-check the forecasted revenue postings.
STILL not convinced….? Okay, well look at conference space overselling (yes I have seen conference space overbooked, all in the sake of revenue!) – lets just say that when they all confirm and guarantee their booking by contract, then the hotel is screwed, massively! I have had to put people in bedrooms that have had beds removed (fantastic when they are interviewing people in the room for high powered jobs or similar!), or even in penthouse suites that have had tables and sofa’s removed. This closes out bedroom stock from sale, and the usual response from sales (as is heard so often) is ‘Well, we only get paid to sell it. It is the Duty Manager’s problem to sort it out!’ The hotel then gets overbooked because bedroom stock is taken for conferences; additional staffing is needed to change the rooms around, increasing costs and practically all but eliminating the revenue you made from room hire in the first place – plus the conference organiser may complain and end up with a refund – the clamouring for revenue backfires again! Again, operationally the costs increase, staff stress levels increase, jobs get abandoned because people are too busy to do them, and revenue gets lost even further.
Right, I think my point is fairly well made here overall. The fact of the situation is that in far too many cases, the clamour for every last penny actually ends up costing money or staff – remember that people are human and have limits. I have been pushed to the point of near collapse because of the amount of work to do and pressure you are under. When you work as a duty manager, you have to pretty much abandon and write off most health and safety legislation to get your job done – you can spend 4 hours moving chairs and tables, and still not be half way through what you need to do – the issue being that revenue dictates you cannot have anyone to help because that will cost money.
Let me make this clear – every decision made by sales and/or revenue has an effect on Operations, and often not in the best of ways – the decision taken from behind a desk is very different to the actual ‘put it in practice’ that is needed – I have been shocked to the core when I have had sales managers come down for a conference room key, then ask where the conference room is! WHAT???? Someone who sells these rooms and spaces, doesn’t even know where the room is!
And there lies the issue…. sales do not generally have the experience in operations or vice versa. Sales is pressurised and often targets are stretched to breaking point; but operations are also very pressurised and have targets to meet – KPI’s have to be maintained, standards have to be maintained, staff have to trained yada yada yada… the list goes on.
There is a huge misunderstanding between lots of the revenue and operations side of things. Revenue are targeted on money – it is their job to sell and get money, and they will do that regardless of what the operational challenges are. This is usually akin to the effect noted in ‘Hitch-hikers Guide to the Galaxy’ coined as SEP (or Somebody Else’s Problem!) – this is simply what is says on the tin – sales do not have to deal with it; they have hit their target and achieve their goal – actually dealing with everything is now ‘Somebody Else’s Problem’. Operations do the same back – when someone wants an extra room or extra equipment, it is passed to sales to get the sign off on payment – if payment is refused, it then becomes the issue of sales to sort it out. So this matter works both ways, although operationally, it usually feels like it is one way – from sales, down to the people who do the job.
Overall, I would like to say that if you concentrate solely on revenue, you will hurt your reputation and damage your staff base – you will lose good staff, create a bad atmosphere, put people under unbelievable pressure, and actually cause more issues in the long run – revenue should NEVER be managed solely in the here and now – always look forward and ultimately, if you keep pushing and making demands of people that are unrealistic, you will end up with someone tell you to just do it yourself, and leave you with their role to fill!
So there is my rant and ramblings – the effects of revenue on your team and more criticism and cynicism of the ongoing battle between sales, revenue and operations. I am launching a challenge soon across the industry surrounding this matter, so keep an eye out for it and hopefully, take part! I will publish some of the challenge diaries on here!