Malcom Leong came to be a revenue manager by accident. After he enrolled on a program at Singapore Airlines, he had various roles throughout the company before finding his passion for numbers.
He ran teams in China and Bangladesh, before leaving Singapore Airlines to join Far East Hospitality, with the vision of building a company as lauded as his former employer.
After more than 10 years as a revenue manager in the travel industry, he has seen his responsibilities shift and the expectations of his role expand. Here, he shares some of the wisdom he’s picked up along the way, and explains why the term ‘revenue manager’ needs to be redefined.
Click.: What essential lessons have you learned during your career?
Leong: The textbook revenue manager definition - selling the right room, to the right customer, at the right time for the right price - is incorrect. I disagree on this definition because there’s an overemphasis on the word price.
Price is only one of the four Ps - or seven Ps - of the marketing mix. So, in today’s world, I don’t think a revenue manager should be talking about price only. He should be thinking about how to use all the marketing levers to maximise revenue.
Revenue management has evolved over time, and it’s no longer about just price and inventory management
For example, let’s say your company is building a website. Does the revenue manager have a say in the building of the website? By the textbook definition, the answer is no, they just release the price of the hotel room on a website. But the revenue manager must have a say in things like this, in all marketing matters. For example, they need to be able to influence how hotels are going to attract different personas online, from the corporate booker to the leisure traveller.
Ultimately, I think revenue management has evolved over time, and it’s no longer about just price and inventory management.
Click.: How is technology changing things for revenue management?
Leong: Lots of technologies used across many industries apply to hospitality, such as machine learning, artificial intelligence and personalisation. But the reason I mentioned my own definition of revenue management, is that if we do not see the role in a broader scope, the impact of today’s tech on revenue will be limited.
In my opinion, when you redefine the revenue manager role, talking about maximising revenue using data driven marketing, then the scope of technology is way broader. The tech stays the same but the revenue manager needs to be part of the decision-making team that establishes how that technology stacks up in a company.
My revenue management team is made up of three pillars. The traditional revenue managers – the pricing guys. I also have my data science team and my marketing team. I have to pull these three pillars together with the sole purpose of maximising revenue.
Click.: What are the essential skills a revenue manager needs?
Leong: A revenue manager should at least be analytical, good with numbers. But the next essential skill I look out for is being inquisitive. Because without that you will never go beyond what you normally do. A revenue manager should be inquisitive about what the data is saying, what the trends are, what they can see that their competitors do not.
They also have to be good storytellers. I see this happen a lot, where they look too much into the detail, they know too much - and because they know too much they assume their audience are as clued up on the issue as they are. Therefore, they do not tell a story that is simple enough for their audience to understand and accept, and ideas and proposals don’t get off the ground.
Click.: What are key components of good pricing and distribution strategies?
Leong: I want to focus on one key component: the target customer. If you don’t understand your target customer, you will not know how to price.
In the past, the traditional view of the target customer was dependent on the distribution channels you sell through. Hoteliers would think that the OTAs only brought in leisure customers, and the GDS just the corporates. But with today’s technology, things are more muddled up and corporate clients are booking through OTAs like Booking.com.
That’s why data-driven marketing and using different pillars of marketing to attract customers is so important.
You might also want to read:
- Getting the most from your revenue management strategy
- Maximising revenue with the right channel mix
- A day in the life of a revenue manager
Hero image: Helloquence
- Malcom Leong began his career at Singapore Airlines and has worked in revenue management teams since 2002
- He believes the role of a revenue manager is misunderstood and needs to be redefined for today’s technological landscape
- The key component of a solid pricing and distribution strategy is knowing your customer
- Revenue managers, he says, have to be inquisitive in order to excel