4 Communicate

As has been illustrated, revenue management requires organizational and analytical skills.

However, an additional skill to develop - especially as you scale - is how to effectively communicate revenue management to other stakeholders.

Simply put, your ability to offer concise, data-driven explanations in a timely and consistent fashion can create a lot of value (and, confidence!) for you and others. And, continuously investing in this practice will expand the scale of your portfolio and career opportunities.

In the last decade, revenue management has evolved from a niche analytics department to a leadership function that now often sits above (or alongside) marketing, sales, and other revenue functions.

In this seat, revenue managers act as a hub between multiple parties, ensuring revenue strategies are communicated and decisions are understood by teammates, owners and executives. Therefore, it might make sense why veteran revenue managers cheekily describe their field as, “geeks who speak”.

In this chapter, we will illustrate how to ladder up your organization, identification and intervention skills to support effective communication.

We get it. Despite starting with strategy, at least one aspect of scaled revenue management requires thousands of tactical decisions.

Around rates, these are often small changes—a rate increase for 20 properties for a particular date range, the decision to hold rates for 35 others, a decrease in minimum stays for a slow-booking weekend, etc.—that are made daily and, to the experienced RM, will feel like intuition.

Given the fast-moving nature of your work—especially as you scale—it is essential that you develop the habit of documenting your work, process, and thoughts in order to have the foundation in place to communicate effectively and consistently.

In short, documentation enables your “past self” to set your “future self” up for success in all of your activities, and failure to document will leave you scrambling for explanations as soon as the market—or a listing's performance—starts to slow.

Robust documentation is not just about the actions you took; it also includes inbound requests, owner/property information, timely follow-ups, and supporting context for how you were thinking—and what data you were looking at—when you made a critical decision.

While documentation may at first seem to be a nuisance, when done well it will serve as the foundation of all of the processes and systems you develop. In this light, you may well want to view documentation as the process of creating data that will inform the revenue machine you want to develop.

So, let's get to work on some initial documentation!

• On a daily basis, start to write out the outlines of questions, decisions, adjustments, predictions, and even "hunches" you have (e.g., “I think lowering this rate is going to drive X amount of new bookings in the next 3 months”).
• You should create a "running doc" that you keep open throughout the day in order to quickly add notes, thoughts, and updates.
• Increasingly, teams leverage RM software that enables you to attach notes to specific listings, time periods, and settings and can automatically track changes you make to rates, restrictions, etc.
• Many of these notes may well flow into your reporting or meetings (more on this below). Therefore, you will want to (a) be able to gather these notes quickly and (b) likely have at least one internal document with your own private notes that are not yet ready for sharing with owners or teammates.

• Tracking requests from owners, teammates, or executives is one of your most important activities (e.g., "Please set the minimum rate for our summer season to $250" or "Please block these nights for the next 90 days to see if friends want to use them").
• These requests can include owner restrictions, rate change requests, data requests, guest restrictions, listing-specific fees, property details, and more.
• Make sure you have a process to quickly document requests, and get in the pattern of following up promptly to ask for more details or confirm you have made the update.
• Storing all these requests in a centralized place will be a critical aspect of any scaled or accelerated revenue management team.

• On a monthly or seasonal basis, you should take time to more deeply reflect on your notes, adjustments, strategies, and outcomes.
• Taking a step back to analyze why decisions were made—and which strategies succeeded—will allow you to refine your ongoing strategies.
• Also, taking time for this longer step back and analysis will help you navigate future decisions more effectively, particularly as they relate to year-over-year trends.

What?! This guide is going to talk to me about reminders?!

Well, remember how great documentation is about your past self setting your current/future self up for success? Quickly and effectively creating "alerts/reminders" is often a critical aspect of accelerating your process and making sure you - or your team - can stay on point.

So yes, we're going to take a minute to discuss setting reminders both for (a) owner and teammate requests, as well as (b) changes/adjustments you made to a strategy.

• For custom rate or minimum stay requests from Owners you'll want to set a reminder to check back in on a later date to ensure those dates have sold or that the requests are still reasonable given the dates they're set on and how far away they are. Sometimes you can have your owner facing team negotiate these expiration dates (Wheelhouse enables expiring custom rates) from the get go!

• For strategic changes, you will want to have a clear time to check back on your adjustment, to figure out (and document and/or communicate!) the impact of your change.
• Observing how changes affect results allows Revenue Managers to further optimize on decisions which work and backtrack on decisions which fail to materialize or cause sales to stall.
• If possible, the RM should set these reminders in their RM platform, however calendar reminders are an effective approach, as well.

With effective documentation underway, you now have a solid foundation for your own work.

Therefore, let's discuss how to communicate internally with teammates who will want or need to know about the performance of the portfolio.

Effective reporting will both accelerate and stabilize your team in high- and low-demand times, giving you the ability to focus on the critical business decisions you need to make daily.

Therefore, let's illustrate some of the reports you can (okay, should!) create and share with teammates in order to streamline your revenue operation:

• Primary Goal: Report performance to the executive team (and potentially the entire company) at a high level so they can quickly understand the company's financial performance and trends.
• Audience: Executive or Leadership team. Sometimes this report is available to the entire company.

At a minimum, a weekly report detailing revenue (and likely occupancy) performance should be created, edited to certainty, and proactively shared with your team or executives.

Often, this report will display data at the monthly level and may include the year-to-date performance figure, pacing, and how your current performance compares to historical KPIs, your budget, or your competitors.

• Primary Goal: Provide a snapshot of the current sales situation and context for the Revenue Team's decision-making.
• Audience: Director of Revenue and Revenue Team. Sometimes this includes the leadership team if it prefers more detail in its revenue reporting.

Remember your pick-up and pacing work? Now it's time to start leveraging that information to clarify how the portfolio is selling now and what interventions you recommend taking. Ideally, this report can highlight any segment of properties, showing revenue and occupancy "on the books" (OTB).

Reports that feature these charts—paired with notes regarding pricing actions or qualitative descriptions of what is happening and what decisions are being made—can be the foundation for a highly aligned next few weeks of work and monitoring.

• Primary Goal: Describe market trends and conditions, supported by simplified data that clearly shows these trends. Briefly describe the biggest tactical approaches the Revenue Management team plans to take based on these trends.
• Audience: Owner-Facing Teams and Leadership Teams

On a quarterly basis, proactive revenue managers will provide a report that offers more details about portfolio performance versus CompSet and market trends.

Ideally, this report will include at least one external data source to substantiate your analysis.

The data provided here should then be summarized by you or the revenue team, detailing how you interpret these conditions and trends, how they are likely to impact the business, and what your primary tactical approaches will be based on this assessment.

Below is an image of the Adjusted RevPAR performance for the Seattle market by month and year. Multiple metrics are ideal to send to the team for better context, so including Occupancy and Average Daily Rate reports would be useful in addition to RevPAR.

Similar to weekly reporting, effective revenue meetings—that give teammates a chance to coordinate and stakeholders a chance to ask questions—are the hallmark of an effective, scalable revenue team.

Both a report and a meeting can be used to disseminate information; however, a meeting can uniquely be used to solve problems or coordinate between teams. Again, understanding the audience and the purpose of the meeting is paramount to its success.

Examples of meetings and their audiences:

• Primary Goal: Coordinate tactically among revenue stakeholders
• Audience: Revenue Management team, and sometimes Marketing, Sales, and Distribution team members

Ideally, this meeting is not for reporting, as that information is already in the reports sent out. Rather, this meeting is an opportunity for Revenue Management stakeholders to discuss tactics.

This may mean coordinating marketing campaigns with revenue trends, Revenue Management working with distribution to optimize listings that are underperforming, or Revenue Managers discussing how to react to trends visible in the data or sharing ideas on how to optimize revenue.

This meeting aligns well with the “Weekly Pacing or Pick-up” report.

• Primary Goal: Report on revenue management initiatives, performance, and high-level trends in order to coordinate and calibrate your revenue strategy
• Audience: Leadership Team

Revenue strategy meetings are used to disseminate information on revenue performance to other teams. Generally, this is an inefficient use of time if many people are involved when a report could more easily provide this information.

However, when the Revenue Reporting meeting remains high-level and the time is used to troubleshoot or collaborate on strategy, concerns, or opportunities around trends, this time can be used effectively.

This is a fine line to walk. It is easy for teams to allow this meeting to become a report where the Revenue Management team reports on the key KPIs for each individual market or listing segment. Rather, Revenue Management teams should use this time to present their analysis of trends and set an agenda specifically around building consensus on how to approach potential situations. Data reporting should remain high-level, with data on more specific segments pulled up to support an analysis or claim by the Revenue Team about what it expects or is requesting consensus on. Reporting on segment performance can be deferred to another meeting or followed up on after the meeting.

An example would be that the Revenue Management team has become aware that international travel is down and expected to decline further for a given market. Originally, the strategy was to maintain occupancy but drive ADR higher, as the team was expecting strong demand. Now questioning that demand potential, the team outlines the situation and supporting data to the executive team, asking if it would still like to:

a) Pursue an ADR growth strategy (higher risk) by holding rates later in the window;

b) Switch to an occupancy-based strategy to mitigate risk while limiting rate drops to a percentage agreed upon by the team;

c) Move marketing dollars to try to generate demand from other segments to make up the shortfall; or

d) Discuss other ideas among the team.

The Revenue Team can use this time to collaborate with other stakeholders in the organization while ensuring team members are informed of what could happen, aligned on the general response, and aware of its ramifications.

Owner communication is the lifeblood of successful property management.

We all know owners can be... opinionated! However, we need to remember that the properties we manage are both a family home and an investment or asset rolled into one. That is quite the recipe for strong emotions!

And revenue performance—along with property and guest care, maintenance, etc.—is one of the primary drivers of owner satisfaction and retention.

Today, most teams are increasing their investment in making sure their owners feel informed about the approach you are taking—and the data, software, and strategy you are leveraging—to create the most value from their property.

Especially in the VR space, where one owner churning can sway many others to make a similar move, it is paramount that revenue management supports your team's efforts to ensure owners feel informed and aligned with your approach.

Therefore, let's discuss some of the approaches you can take to drive better owner engagement and communication.

The more seamlessly you tailor your approach to suit the owner's unique preferences and priorities, the easier it will be to get your message through. It starts with the basics—knowing whether they prefer detailed email updates, texts, phone calls, or even occasional in-person meetings. It should go without saying: you will want to document what you learn about each owner!

A major aspect of effective communication is making sure you are speaking in the owner's language.

There are two approaches that we've seen be highly effective in communicating with owners.

• Start Simple: Work on providing a timely, simple report to owners that includes their revenue and occupancy for the past month or quarter, revenue pacing for the next 3–6 months, and potentially details about year-over-year performance or performance relative to a few similar properties. If you take this approach, expect that this report will be sufficient for 75% of owners. For the 25% who want more information, you should have a template in place to share more details—with more defined as enough well-presented detail to keep the owner happy and perhaps save you a meeting!
• Start Complex: Perhaps surprisingly, we have talked to teams that pride themselves on sending very detailed owner reports. Why? They have found that for certain owners, it helps those owners realize what we all know: revenue management is a complex skill! However, if you always start with this approach, you might find some owners who say, “Can you tell me what this all means?” Given the note about personalization above, it is a best practice to develop at least two owner reports—a basic and a complex version—and be ready to send either of them in a timely fashion, depending on each owner's aptitude with or appetite for data.

And as we all know, some owners focus solely on maximizing revenue, while others prioritize consistent income or preserving availability for personal use. Make sure you pressure-test either approach in a considerate fashion, and remember that preferences change!

For example, it is not uncommon for owners to block a few weekends early in the year as potential times they want to use their home. As the year unfolds, life and travel plans can shift, so you would be wise to check in on all blocked nights that fall in high season, gently asking if those nights should be opened for sale if they are no longer likely to be used.

While some owners will look to your team to have all the answers, most owners would welcome the chance to provide feedback, especially about their upcoming pricing strategy around high season, holidays, or important time periods.

Therefore, consider building into your practice a way to at least lightly involve them in conversations such as:

• What are the three most important weekends or weeks you want us to be especially diligent about?
• Do you have any specific requests about how you want us to price and list those dates (e.g., minimum prices or minimum rates), or do you want us to watch the market closely and aim to optimize them for you?
• If you have specific rate recommendations and your property has not booked near the end of the major booking window, do you want us to hold your rates or adjust your strategy proactively?

Sure, this might seem scary. However, this type of communication—with your own tone and questions—is going to greatly impress most owners and give you ample evidence of your efforts to drive revenue, results, and alignment should a market downturn occur.

In addition to driving revenue and owner retention from your current portfolio, revenue management can—and should—be a driver of your portfolio expansion.

The materials you analyze and create to report on your own portfolio's performance often already include analysis of other listings, comp sets, markets, and more.

This information can serve as both (a) the data layer you need to provide a pro forma to an owner and (b) the knowledge of what types of properties and locations are in high demand in an area, thereby focusing your outreach.

By sitting so close to market data, you will be well positioned to determine when and how to target new owners in order to drive your portfolio expansion.

For example, for a currently managed property in your market, you can provide specific examples of how your properties performed during high season, low season, or a major event. This financial literacy will greatly appeal to owners who are sensitive about the revenue performance of their properties.

While every property manager can promise the moon in terms of revenue creation, grounded, rational, data-backed insights about how a property could perform—and how it should be priced and set up to drive performance—will often win the day.

Additionally, illustrating that you can effectively use data and pricing software to protect and amplify a property's performance can be a major determinant of whether you win the owner's trust and business.

With your reporting examples already developed, you would make an ideal candidate to join any sales call to help convince a skeptical owner of the value of working with your team. Again, a decade ago, a revenue manager engaging in outbound sales was almost unheard of. Now, you can add a lot of value—and drive exceptional growth in your portfolio—if you develop the skills to join a sales call and confidently express the revenue opportunities you see in their property.

Owner teams need to be able to explain to owners why listings are priced the way they are or what to expect performance wise while business development teams need to be able to describe the organization’s strategy to improve their owner’s yields. An example of types of communication or reporting for these specific purposes can be seen below:

As discussed above, you may well want to have two or more owner reports that you can easily generate and share with owners.

Here's an example, using the Wheelhouse Reporting tool, of the performance of multiple properties compared to the market:

Here's another example where the owner's listing compares to a specific comp set and has fewer stats in the actual report (sometimes simpler is better!):

With the Wheelhouse Reporting tool, you can save specific report templates to use when communicating with stakeholders such as owners or internal teammates. The reports can be shared via the "snapshot" feature, which allows others to comment and communicate!

Effective communication is complicated and a seemingly never-perfect art.

Therefore, the details described above are just the foundation of approaches, materials, and meetings that we've seen create a healthy environment for the deep discussion of revenue management strategy.

As you develop these foundational materials and structures for your revenue management team, you will gain the ability to keep your team aware of the whole lifecycle of your portfolio performance - where you've been, where you are now, where you are likely heading, and what you will do if things change.

When done well, you will quickly earn the trust & confidence of your teammates & owners, earning you the space to execute effectively without - okay, with less - second guessing.