REVENUE MANAGEMENT UNIVERSITY: A CRI SUCCESS STORY

Hotel revenue management is the discipline of determining hotel rate structures and room availability in order to maximize revenue. It is an extremely complicated and analytical process that involves both science and intuition.

In the past, Hilton Hotels’ revenue managers were provided with access to countless data sources and limited training on how to access, read and interpret data. Analysis and decision-making skills were developed primarily through on-the-job experience. As a result, Hilton had experienced uneven revenue management results and limited capacity for expansion.

Hilton sought to increase its revenue management power by establishing consistent revenue management processes, documenting best practices, and providing better guidance and support to its Directors of Revenue Management (DRMs).

Working on the hotel giant’s behalf, CEP interviewed Hilton DRMs and other SMEs to:

• Develop a job profile outlining the major tasks and performance criteria for the DRM position
• Outline the steps and decisions for successful performance of each task
• Determine the skills needed to perform each task and arrange them into learning hierarchies, including prerequisite skills for newly hired DRMs
• Identify barriers to performance other than lack of skill or knowledge

Based on this analysis, the project goals, performance expectations, task procedures, skill requirements, target audience characteristics and performance barriers, the following solutions were identified:

• Provide DRMs with step-by-step procedures and other performance aids for each task that reflect Hilton’s best revenue management practices
• Develop a detailed candidate screening process to ensure that DRMs are hired with the proper prerequisite skills and characteristics
• Provide DRMs with the training support needed to ensure they have the skills to be successful on the job

The subsequent training course that was developed - known as Revenue Management University (RMU) - included the following characteristics:

• Flexibility to ensure easy customization of the course for hotels of differing size, type and geographic location
• A "campus" environment to encourage the flow of ideas and experiences among DRMs and to minimize job distractions
• A self-paced format so the DRMs could take the time needed to master each skill

RMU Results

• Since RMU was implemented, Hilton’s industry ranking increased from a C to a B+.
• 40% of the individuals who graduated from RMU earned promotions within six months of completing the course.
• Hilton has grown in market share and penetration in most major markets since the inception of RMU, surpassing all major competitors but one.