The big questions on everyone’s minds to start this year seem to be “When will the pandemic end?” and “When will the hospitality industry recover?” The answers are a Rorschach test; you can find plenty of evidence to support most reasonable forecasts. Improving consumer confidence, increasing vaccination rates, and the rise of “revenge travel” strongly suggest we could see a robust travel season by summer, if not before. But slowing economic activity, worries about new, more virulent Covid variants, and tight business travel budgets point to a longer, slower recovery.
So, which is it? Are we looking at a boom, or are we in for a long, slow slog to recovery?
What if I told you that worrying about when the travel industry will recover is the wrong question. We know travel will recover, eventually. Regardless of any economic forecasts or expert prognostications, there’s one thing we know will be true: It will change. That will also be true next year. And the year after that. And the year after that. And… you get my point.
Instead of channeling our inner Nostradamus, what if we prepared for a variety of scenarios, including the ones we can’t easily predict?
There’s a way for hotel revenue generation teams – marketing, sales, and revenue management – to do that. How? Establish and follow an Agile RevGen framework that allows your team to adapt quickly and appropriately as circumstances change.
What ‘Agile’ RevGen Means
While we all know what it means to be nimble, “agile” in this context has a precise meaning. Borrowed from the Agile Software Development Movement, Agile is a set of methodologies designed to produce robust results in relatively short time frames that meet rapidly shifting business requirements. Call me crazy, but that sounds like something everyone in revenue generation could get better at — especially in 2021.
Truly Agile RevGen relies on a series of principles adapted from the Agile Manifesto (and its offshoots) to adapt quickly as real-world circumstances require.
These principles include:
Focus on customers. One of the few measures that matter in Agile software development is whether customers got what they wanted. Hospitality professionals already strive to ensure guests are satisfied with our efforts, so this is an obvious first place to start.
As customer needs shift – and their needs are changing just as much as yours right now – marketing, sales, and revenue management teams must recognize those changes and respond accordingly.
Welcome changing requirements. Prior to the introduction of agile methodologies, developers relied on detailed requirement gathering and documentation before beginning to cut code. “Change requirements” documents could run to dozens of pages and delay delivery by weeks or months. Instead, the practice learned to work in a shorter, more streamlined fashion to adjust on the fly as needs changed.
This mindset, critical to success in modern software development, is key to handling the shifting realities we will face in 2021. Acknowledge that you have limited control of upstream events and are better served learning to work on shorter timescales, learn from real-world results, and adjust quickly as the situation requires.
Establish cross-functional teams. In traditional software development, business owners provided their requirements to “business analysts,” who documented needs and handed those off to project managers/development managers who then worked with developers to produce the software. Agile requires instead that all members of the team work together to collectively own the results.
While hospitality RevGen teams have made strides in this direction, there’s clearly still work needed here. If your revenue managers, marketers, and sales professionals aren’t working together to identify the best opportunities for revenue and profitability for your hotel, why not? Look at competing incentives and align them to drive resources and efforts toward a common set of shared objectives.
Value meaningful results. For years, IBM famously measured its developers by how many lines of code they produced each day. Even before Agile emerged, Microsoft realized it was more useful to focus on whether their developers’ code, y’know, worked.
Now is the perfect opportunity to look at your team’s objectives and ensure that you’re measuring what’s meaningful to your hotel. Is your marketing generating interest among current and future travelers? Is your revenue strategy delivering profitable revenue? Are your salespeople finding new sources of revenue to offset market segments that may drag for a while? Focus your RevGen team on metrics that matter and invest in those areas most likely to produce real results now and when the inevitable recovery occurs.
Keep things simple. Finally, look for ways to streamline processes and reduce overhead for your RevGen teams. This doesn’t mean eliminating SOPs. Instead, make sure that those SOPs enable productive, practical outcomes in a changed world.
This Doesn’t Mean Don’t Have a Plan
Just because predicting the future is challenging doesn’t mean you shouldn’t plan for it. Likewise, adopting an agile mindset for your revenue generation activities doesn’t mean operating without a plan. Instead, it’s about:
- Anticipating likely scenarios in your plans.
- Making your plans flexible to adapt to changing market realities.
It’s fairly straightforward to model scenarios where, for example, vaccines roll out slower or faster or where business travel recovers to 30%, 60% or 90% of past volumes, and then to prepare for what each of those would mean for your business. Implementing an Agile approach allows your team to adjust quickly as any of these scenarios start to emerge.
Uncertainty is “the new normal” for this year – and potentially beyond – whether we like it or not. Rapid changes in the underlying health and economic situation will make forecasting your business difficult and dynamic. If we know this will be true, don’t let it surprise you. Instead of worrying about when the industry will recover, empower your team to react quickly to shifting demand patterns and changing guest needs. Focus on developing an Agile RevGen mindset within your team and you’ll be better prepared to manage through the recovery — no matter when it happens.
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