It’s often said that a downturn is the best time to make changes. While the COVID pandemic decimated demand and revenue for many businesses, one positive is that it gave us time to pause, reflect and – in some cases – reset.

    One of the most impactful resets you can make to your business is shaking up the org chart. Because generating revenue is critical to future success, more emphasis and responsibility should be placed on the teams and individuals who affect incoming revenue the most. Revenue, sales and marketing teams have the biggest impact here, so it’s natural that leaders from these departments should be elevated as decision makers and given the right tools and resources to operate most effectively.


    Soundbites Podcast with guest:

    Raul Moronta, Chief Commercial Officer, Remington Hotels


    Instead of these departments each operating independently, they should all be connected by dotted lines to a single leader who oversees all aspects of revenue generation. Some of the most forward-thinking companies are putting a Chief Revenue Officer or Chief Commercial Officer in place to ensure coordination between the three revenue generating departments and enact cohesive strategies around the same goals and performance metrics.

    “Whenever you have a large company that has three disciplines that report into different leaders, there tends to be silos,” says Garine Ferejian-Mayo, newly appointed Chief Commercial Officer at Sonesta International Hotels. Speaking on SHR’s Soundbites podcast, Ferejian-Mayo said with Sonesta going through such vast growth, the company needed to have a leader that oversees those three disciplines to ensure the team is moving in the right direction with proper collaboration and communication.


    Soundbites Podcast with guest:

    Garine Ferejian-Mayo, Chief Commercial Officer, Sonesta Hotels


    At Remington Hotels, a manager of around 80 full-service hotels across the U.S., the disciplines of revenue management, digital marketing and sales are now referred to as “commercial strategy.” Remington recently appointed a new Chief Commercial Officer to “bring the three legs of the stool” together, according to CEO Sloan Dean.

    “We'll look back and that will be a good byproduct of the crisis – the fact that, on the revenue side, those three primary disciplines have been merged together,” Dean said while speaking on a recent episode of the Lodging Luminaries podcast. “That will provide a lot more career flexibility too because leaders won’t get pigeonholed as just a revenue management person or just a salesperson. You really have to be cross-functional.”

    Below are three reasons why it’s time for you to make room in the C-Suite for a “commercial” professional who oversees yield management, sales and marketing.



    Brings Sales, Marketing and Revenue Together

    It’s no secret that, despite years of being advised otherwise, company departments continue to operate in silos. Most companies still manage their marketing and sales departments independently and few have achieved successful holistic revenue operations.

    Instead, leaders should build a single‐minded team within their organization – a revenue generation team that is responsible for acquiring and retaining guests, optimizing performance and increasing revenue. The leader of this coordinated team should have a seat at the corporate table and should oversee an integrated revenue strategy across the entire portfolio. He or she should be a cross functional leader, well-versed in all three disciplines.

    “You’re seeing, with a lot of companies, there's a merging of all things commercial and people that work on those teams need to understand the different disciplines,” Dean said. “It's less siloed than it was traditionally. The pandemic forced hoteliers to make these moves because, in many cases, companies laid off much of their commercial team and all of a sudden you have revenue managers who are doing marketing and salespeople that had to help with revenue management activities. So there was a lot of cross-pollination simply because you have less headcount.”

    “In some organizations, RM is increasingly a sub-department under a larger umbrella called ‘commercial department’ which houses sales, brand, marketing, e-commerce and revenue as it is recognized that all of these sub-departments don’t work in silos,” according to past research conducted by Sheryl E. Kimes of the Cornell Center for Hospitality Research in a paper titled, “The Future of Hotel Revenue Management.”

    It’s a natural fit to look to a former revenue leader to fill this role. After all, revenue-minded folks have long provided the framework – the data – that then shaped strategy for the marketing and sales teams.


     Check out our revenue generating applications CRS, CRM, and RMS (4)


    Centralize Operations

    As companies enacted cost-cutting measures and operational efficiencies to weather the storm brought on by COVID-19, many were forced to downsize their staff. This means fewer people on property to manage day-to-day operations. Instead, leaders in a central location – whether at headquarters or in a remote location overseeing several markets – are taking on more responsibility and overseeing strategies for entire portfolios.

    A CRO or CCO can be centrally located and rely on communications tools like video conferencing and digital communication platforms, which are much more widely accepted now, to distribute strategies and delegate responsibilities.

    In Kimes’s research for Cornell, she predicts a hotel company’s revenue functions would be more centralized in the future, and we see that coming true. Responses to her survey for the paper indicated that, “While to a large extent there is the drive and push from central RM entities, the progress has been slow as much of the execution takes place at hotel level, and it remains a challenge to change the culture, mindset and adoption due to several hurdles. Some owners are unwilling to pay more for the RM role to attract the right talent, or to move to a centralized structure. Also, HR may find it financially challenging to elevate the role of RM across the board, or lack the talent to find strategic thinkers.”


    Implement Data-Driven Approaches

    For the CRO or CCO role, companies should consider analytic thinkers with a background in revenue management. These folks best understand data – how to draw conclusions from large sets of numbers and then act on the insights by implementing successful strategies.

    There is more revenue data than ever before, and every decision made by marketers or salespeople should be based on it. Data should inform a company’s strategy behind segmentation, distribution, guest acquisition, guest retention, pricing and even operations. In addition, folks with a revenue background often best understand how to get the most out of technology, relying on it to pull the right reports and automate manual processes.

    Data will provide the path to a company’s success moving forward and having a leader in the C-suite who understands how to make data-driven decisions that impact the entire organization will only improve revenue, sales and marketing functions.

    Before the COVID pandemic and subsequent travel lockdown upended the hospitality industry, companies were striving for more coordinated, data-driven strategies. In some ways, the downturn has given agile leaders the opportunity to take action by rethinking their organizational structure. Companies that don’t take the opportunity – that sit back and wait for things to return to normal – will unfortunately find themselves left behind.


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