4 questions for Lily Mockerman, Total Customized Revenue Management

Lily Mockerman, president and CEO of 5-year-old Total Customized Revenue Management, is attending this week’s Hotel Data Conference in Nashville, where TCRM is also an event sponsor. A proponent of continuous education, both for her clients’ teams as well as her own, she comes to this week’s confab accompanied by four of TCRM’s staff members in order for them to keep current on the industry trends and developments. Here, she speaks to HOTEL MANAGEMENT about several key aspects of revenue management that she believes could generate better numbers for properties willing to step up their knowledge base.

What one aspect of a hotel do you find is most overlooked as far as its impact on the property’s revenue management?

The first thing that comes to mind is the front office. Many hotels may have an upsell program, but very few do a great job with it. Often with upsell programs, the agents are inconsistent in delivery. Whether that’s a motivational piece or an education piece varies by company. But it’s also a program where many hotels just focus on upgrading a guest from a standard room to a suite. We’d love to see more hotels monetize all different types of scenarios that could be an upgrade. It could be [food-and-beverage] credit that causes the guest to spend more of their money at the hotel, enhancing the hotel’s revenue. But the front desk also needs to be motivated to upsell.

I also find that the front-office manager is generally not present with most companies and I feel it’s really essential to have them buy in and support a total revenue-management program because the front desk ends up being responsible for the execution of all revenue strategies, even beyond upselling which is just one piece of it. But they also need to understand why there’s a three-night minimum or why the rate is higher on Tuesdays and Wednesdays and lower on Thursdays. It’s really important to have the front desk buy into revenue management from an educational standpoint.

Direct bookings versus online travel agencies: The consensus is generally that there’s a time and a place for everything and of course, it also depends on the needs of the individual property. But is there any property out there that can depend entirely on direct bookings?

I think the only time that a property might be able to go in that direction is if they are relatively small and intimate—maybe less than 150 rooms. It’s not an option for a branded hotel to be direct only because of the agreements that they have in place. But for independent hotels, reputation is also important. They would need to be a brand unto themselves. In other words, they would need to have name recognition equivalent to a major brand, where people know the name even though it’s not attached to a “true” brand.

Your company offers enterprise technology project management. What advice could you offer to an industry often hesitant to invest in technology as far as when and why it is time to implement new systems?

We’re often in this position. It depends on what the property is trying to accomplish.

But I find one of the most difficult problems that I encounter is inflexible systems that are not adaptable. Systems are often a major challenge for hotels because they’re simply not built in a way that allows the user to adapt their strategy to total revenue management. There are many other scenarios, but this one has been a hot button recently in terms of adaptability. Some of the newer software is cloud-based and built in a way that can be quickly adapted or upgraded, in contrast to some of the larger legacy systems that are out there.

Where do you foresee the future of hotel revenue management evolving?

I think total hotel revenue management is a major trend for the future. More and more hotels are focusing on how to apply revenue management to their restaurants, bars, golf and spas because it can create huge profit for a property in a short period of time. I expect to see much more of that. I also think there is a real vacuum in the need for better systems, not specifically revenue-management systems, even, but property-management systems and CRS systems like Sabre or iHotelier where hotels need stronger functionality around how they support total hotel revenue management.

Also, a lot of hotels are focused on revenue management right now, and the level of support required continues to grow. So I think one thing the industry really needs and that we try to support is a strong focus on education and bringing new people into the workforce in ways where they have the opportunity to learn. I think it’s really important that revenue managers are really allowed to grow and move on to the next level of complexity in their roles as opposed to just becoming pricing analysts, which unfortunately is what you still see in some places.