At a well-functioning hotel, everything begins with transparency and inclusion from
management. The cooperation and understanding between different departments then play a
critical role. A great example of this is the interplay between Revenue Management and
Front Office, which we will highlight in this article.
At first glance, it may seem that Revenue Management and Front Office have separate areas
of responsibility. Revenue Management focuses on optimizing revenue, while the Front
Office is responsible for guest interaction and providing a personalized experience. However,
their collaboration is essential to maximizing revenue while also enhancing the guest
experience. In this article, we will explore why it is important for Revenue Managers to
educate the Front Office team on RM strategies and the consequences of a lack of
collaboration between these departments.
Why Should Time Be Spent Educating the Front Office Team on RM Strategies?
- Increased Understanding of Strategies and Pricing: By educating Front Office
staff in RM strategies, they gain a deeper understanding of how their actions impact
the hotel’s revenue. This makes them more aware of the implications of
complimentary upgrades and low walk-in rates. The Front Office will also develop a
better understanding of overbooking policies, which eases communication and
collaboration with the Revenue Manager.
- Faster and More Informed Decisions: When the Front Office team is well-versed in
RM strategies, they can make faster and more informed decisions, especially in
cases of overbookings or when discussing prices with guests. This reduces the risk of
revenue loss and helps the hotel maintain high occupancy even during challenging
conditions.
- Creates a Culture of Collaboration: Through close cooperation and mutual
understanding between departments, operational efficiency increases, while
improving communication and coordination across the entire hotel. A shared goal
makes it easier to resolve issues and handle challenges that arise in daily operations.
What Can Happen If These Departments Do Not Collaborate Effectively?
- Missed Revenue Opportunities: Without effective collaboration, the Front Office
may miss opportunities to maximize revenue due to incorrect pricing or by
overlooking critical strategies, such as failing to enforce minimum stay requirements.
- Customer Dissatisfaction: If the Front Office is not aware of RM strategies, it can
lead to customer dissatisfaction, particularly if guests experience inconsistent pricing.
This can also affect the hotel’s ability to maintain rate parity with booking channels,
creating an impression of inconsistency and instability.
- Increased Competitive Vulnerability: Poor collaboration between RM and the Front
Office can hinder market competitiveness. It’s important that even loyal guests, who
book directly with the reception, follow the same pricing and restrictions as other
bookings. Any discounts offered should be a strategic decision, not dependent on the
individual team member a guest interacts with at the front desk.
- Reduced Profitability: Ultimately, a lack of collaboration can lead to reduced
profitability for the hotel. If the Front Office and RM team are not working toward
shared goals, the hotel may miss critical revenue opportunities, risking long-term
negative impacts on the bottom line.
Summary
To maximize revenue and create a better guest experience, it is crucial that Revenue
Managers educate the Front Office team in RM strategies. By fostering a sense of shared
responsibility and understanding of how decisions impact operations, the hotel is better
positioned to reach its goals. Increased understanding and collaboration between these
departments strengthen the hotel’s competitiveness and long-term profitability. A hotel with a
strong grasp of its pricing and restrictions also signals stability and credibility to its guests.
Start collaborating with your Front Office team today and see the difference it can make for
your hotel’s revenue and guest experience.
