"So Damario, what do you think now?" asked Sofia Davidson, the GM at the Barcena Resort.

Sofia was conducting the first annual performance review of Damario, the resort's revenue manager. Having concluded the past performance portion of his excellent review, Sofia and Damario were doing some planning and dreaming for the upcoming year.

"Well, I know it may be hard to believe, but I think that from a revenue optimization perspective, next year will be even better than this one," replied Damario.

"Why do you think so?" asked Sofia.

"Because many of the demand forecast and tracking systems that we put in place last year are now starting to really help. We can look at current pace reports and compare them to prior year data. We couldn't do that last year because we didn't have the previous year data we needed," said Damario.

"The data collection systems you designed and implemented have really seemed to help us get a handle on our guests, where they come from, and what they want to buy most," said Sofia.

"Right. That helps with pricing and inventory management. The procedures we put in place over the last year are really beginning to help us make better decisions now," said Damario, "but we also have a secret weapon that I am counting on to drive improvements this year just as much or more than our systems did last year."

"You have secret weapon? Do tell. And what would that be?" asked Sofia.

"That would be ourStrategic Pricing and Revenue Management Committee," replied Damario. "Now that we have been operating for nearly a year, we have finally gotten to a really good place. Now when we discuss pricing, we don't have the controller's office automatically clamoring for increases. And sales and marketing can see past immediate revenue gains from low prices and focus on the profitability of their sales."

"And on our customers," said Sofia. "I've been really pleased at how our guest service metrics have ticked up."

"Me too," said Damario. "We are miles ahead of last year when it comes to factoring customer responses into all of our pricing and inventory management decisions."

"Your guidance has made the difference. You make the committee look good. And you've made me look good too!" said Sofia.

Thanks," said Damario with a smile, "I'm glad you're pleased. Now would this be a good time to talk about my raise for next year?"

"Why did I know this was coming?" said Sofia laughing. "And you're right. This is a good time."

Questions:

1.Based on what you have learned throughout the course, do you think it is data collection and analysis or staff awareness and commitment that will most improve a hospitality organization's revenue optimization efforts? Explain your choice and provide reasoning.

2.In this case study, Sofia indicates that the customer-centric revenue optimization approach utilized by Damario has improved the resort's guest satisfaction scores. What do you think is the relationship between effective revenue management strategies and improved customer satisfaction? Why?

3.Damario indicated that the improved cohesiveness of his committee will be a "secret weapon" driving next year's results. Why is a unified organizational commitment to effective revenue optimization efforts so important? What specific actions can a revenue manager take to help build organizational cohesiveness?

4.Because they are so new, compensation programs for revenue managers continue to evolve. If you were Sofia, what specific factors would you consider when designing Damario's compensation package? How would you measure his effectiveness on each of those factors?