by Cheryl-Anne Sturken | April 4, 2013

Revenue managers are the great and powerful Oz of the hotel world. Largely nameless and faceless, they wield incredible power in setting room rates, which ultimately play a huge role in determining which piece of group business gets priority booking over another. Last week, I got to go behind the curtain for a no-holes barred sit down with Dennis Benford, director of revenue management for the 757-room Hilton Baltimore, which is on track to book 130,000 group room night this year.

Q. The revenue manager has gotten a bad rap with meeting planners. Why is that?

A. A lot of sales people use the revenue manager as an out when they have to turn down a client's RFP. In reality, the sales manager has a voice in pitching the value of the business. Sometimes they just don't want to work for it, and they use the approved rate as the reason the group was declined.

Q. Do you ever speak directly to the meeting client?
A. Not usually, but I have on several occasions. Sometimes, it's actually easier to speak with them directly, than keep going back and forth through the sales manager handling the account.

Q. How do you calculate room rates?

A. There are a lot of factors that come in to play. I look at the calendar, in terms of busy business months, like October, and slow times like Christmas week, but I also look at a group's booking pattern, their pick up vs. their booking, and what else we have committed on the books. Also, I look at how much meeting space they are asking for vs. their room needs, as well as the F&B budget.

Q. Once you set rates, are they in stone?
A. No. Actually, we deliberately quote $20 to $30 above the market price, because group clients expect you to negotiate and trade. On the leisure side, however, the set rate is  based purely on historical transient demand.

Q. How far out do you set rates?
A. Right now, the system can set rates out to 2022, but we actually have business on the books for 2034, and so we are improvising a bit. That said, we are still renegotiating future business that was contracted in 2008, when the market value was at least 5 percent higher than what it would command today.

Q. How difficult is it for a piece of new business to get a foot in the  door?
A. Very high, but if they are willing to be flexible with  dates, we will take a chance and book them over soft calendar dates. That way, if they fall off on their room pick up, we don't go crazy because we know it won't cost us other group business or leisure travelers.

Q. Have you ever given the OK to oversell the hotel?
A. There are times when we do oversell the hotel based on historical knowledge of what we already have booked and what we are currently booking. We might have business that was booked, let’s say, five years ago that now has current history of performing under their commitment with us. In that kind of situation we will need to mitigate the loss. Overselling is a delicate situation and done with caution and the most up-to-date information. I have to admit, I did not sleep well during some oversell situations that I recall. In fact, I don't think I slept at all.