The relationship between sales and revenue management is complex and necessitates collaboration and communication. In The Hotel Sales Playbook, the study guide for HSMAI’s Certified Hotel Sales Leader certification, we offer a comprehensive guide for sales leaders to optimize revenue and drive business success.  

Below, we share excerpts from Chapter 11: A Sales Leader’s Guide to Revenue Management contributed by Dan Skodol, CRME. 

The Interdependence of Sales and Revenue Management 

An effective sales/revenue management team will work together to facilitate idea generation and creativity, responding to opportunities with unique solutions. Members in both disciplines will learn new skills, methods, and knowledge from one another. A strong sales team paired with a skilled revenue professional will feel empowered to take innovative approaches when developing solutions for their customers — they will ask the right questions and be able to talk constructively about patterns, need dates, and concessions. 

Unfortunately, the sales/revenue management relationship sometimes does not get past the “forming” stage. It can be derailed by a lack of communication and flawed decision-making, often based on feelings rather than facts. Sales suffer. Revenue suffers. 

Today, more and more hotel companies are restructuring their organizations around commercial teams where sales and revenue management, along with marketing and distribution, come together to optimize results for one common goal. Each discipline plays a critical role in driving revenue by generating demand and optimizing strategy. Sales and revenue management are important components of the commercial team: revenue optimization optimizes revenue through pricing and inventory management, and sales layers in foundational pieces of business through direct sales techniques. 

Each discipline must stretch its expertise and appreciate the perspective of the other. For example, from the sales point of view, key considerations for evaluating a piece of business with revenue management should include: 

• The total value of the account. How much does this account bring in annually?  

• The total value of the stay, including incremental revenues, catering, in-house spending, etc. 

• The expense and the value of building the relationship with the account 

• The expense or reduction in value from concessions contracted 

 At the same time, the revenue professional’s point of view when evaluating a piece of business with sales should take into consideration the following: 

• The revenue and profit displacement caused by layering the group during a high-demand period 

• The expense to the shoulder dates in closing out transient for group 

• The incremental value based on average transient spend 
• Price sensitivity and the associated willingness to pay by the group 

Sales professionals need to recognize the highly situational nature of revenue management decision-making and the bearing of those decisions on the overall financial outcomes for the enterprise. At the same time, revenue professionals must stretch beyond the “black and white” of the analytics and understand the “gray area” and less tangible aspects of total value over the long haul. 

HSMAI members who attain the CHSL certification will gain professional recognition, career advancement opportunities, and the ability to contribute more effectively to their organizations’ success. For more information, visit hsmaiacademy.org/certification-hotel-sales-leader or contact Kathy Tindell at kathy.tindell@hsmai.org.  

This article originally appeared on HSMAI.