Outsourcing allows organizations to delegate important work to third-party providers who have expertise in a particular field.
When it comes to hotel Revenue Management, some organizations may not yet realize the benefits of outsourcing and have maintained the discipline in-house.
Let’s review why it may make sense for your organization to consider outsourcing the Revenue Management discipline for your hotel.
Why do hotel companies outsource?
The reasons for remote revenue management may be many, but usually cost saving is a top reason. Maintaining a large or small team can be costly, not just in salaries and benefits, but also in other resources, such as office space and equipment. But cost savings is not the only reason companies may outsource. And specifically, when it comes to hotel Revenue Management, below are the top 5 reasons.
1. Save on Labor Costs
For small and independent hotels, or even small management companies, the savings on salaries and benefits can be huge when outsourcing. When hiring on-property, a hotel will typically hire for a full-time position.
However, in many cases, much of the work does not require a full-time employee, meaning the remaining hours of a full-time salary is often filled with non-revenue management work and meetings. Why pay full-time wages when you’re not getting full-time revenue management output?
Outsourcing to a hotel revenue management partner such as TCRM allows hotels to save payroll & benefit costs because we only contract at a fraction of full-time hours, ensuring only revenue management work is being paid for.
2. Staffing Challenges
Arguably the next top reason to outsource is for staffing shortages. Since the COVID pandemic, this has been a widespread issue in the hospitality industry. Yet even before the pandemic, many hotel markets struggled to attract qualified, talented Revenue Managers. Revenue Management is a highly skilled and sought-after position.
In tertiary markets, small cities, and remote resort locations, hotel revenue management positions have been historically hard to fill, often because there was a shortage of quality Revenue Managers in those markets. One solution has been to outsource since Revenue Management work can easily be done remotely.
At TCRM, our team of highly skilled Revenue Management strategists are home-based across the US. Our team is 100% remote and can serve properties in any time zones.
3. Wide Ranging Expertise
Companies often rely on outsourcing when they lack the needed expertise in-house. Hotels often hire Revenue Managers based on their specific system needs.
For example, if a hotel is branded, they will hire someone with experience in that brand’s systems. However, with outsourcing, hotels expand their resource possibilities because consultants usually come with experience from multiple brands and systems. Furthermore, in smaller hotel organizations, one free-standing Revenue Manager on-property may not have like-minded and experienced people within the organization to engage or strategize with or learn from.
Outsourcing to a hotel revenue management partner brings a wide range of experience that is often hard to match because our hiring criteria requires that our strategy consultants have multiple brands and systems experience. This also creates a wealth of knowledge that becomes a resource, since our team collaborates and shares ideas and best practices with each other routinely, which ultimately benefits all TCRM clients.
4. Eliminate Worries about Turnover and Time Off
One of the best reasons for outsourcing is hotels no longer lose productivity when they experience turnover or have staff on extended periods of time off. Every manager understands the costs of turnover.
Lost productivity, lost time and money while recruiting, time and costs associated with training, and more. Outsourcing reduces or outright eliminates this risk.
At TCRM, our clients experience consistent support week in and week out. When members of our team are on vacation, we have others who provide coverage, so no client experiences lost productivity. If we experience turnover in our ranks, the impact is minimized for our clients because we have others on our team who can step in. By outsourcing their revenue management support to TCRM, our clients never need to worry about lost productivity caused by turnover or extended periods of time off.
5. Lessen Operational Risk during Growth
As companies experience growth, they often find themselves needing to hire people quickly. For large organizations, growth can sometimes be absorbed internally with existing staff. But not all organizations can easily do this and find themselves crippled if they don’t have enough staffing. That’s when outsourcing can be a lifesaver.
Some of TCRM’s top clients look to us to help them through periods of growth in their portfolios. Through outsourcing, TCRM can step in either for short-term task force situations or longer-term permanent assignments.
In summary, there are many reasons why organizations may find it helpful to outsource work. Cost savings and staffing challenges usually top the list. Above, I have listed other important reasons and their associated benefits to consider outsourcing Revenue Management duties to TCRM.