The Modern Hotelier #194: The Evolution of Revenue Management in Hospitality | with Daniel McGarry
===
David M.: Welcome to the Modern Hotelier, hospitality's Most Engaged podcast. I'm David Millili
Steve Carran: I'm Steve Carran.
Jon Bumhoffer: And I'm Jon Bumhoffer.
David M.: Steve, who do we have on the program today? 
Steve Carran: Yeah, David. Today we have on Daniel McGarry. Daniel is the area Director of Revenue Strategy for Magnolia Hotels. He has a strong background and operating experience in the hospitality industry and is a strategic thinker who makes data-driven decisions in order to maximize top line revenue. Welcome to the show, Daniel.
Daniel McGarry: Thank you guys so much for having me. I'm very excited to be here. 
David M.: Great. So Daniel, we're gonna go through a couple areas, go and go through a lightning round, get to know you a little bit better, where you grew up, your career, and then we're gonna dive into some industry topics. Sound good?
Daniel McGarry: Sounds great.
David M.: Alright, so first one is, what's something that you wish you were better at?  
Daniel McGarry: Oh, a great question. I wish I was better at getting very consistent lawn lines in my lawn. We just got moved out here from, uh, Colorado to the Lancaster area, and we have. A couple of yardage out front and I still can't get my lines to be straight. I never had to mow a lawn in Colorado, but something I'm working every day on. All right, good. What's the most used app on your phone? Probably chat GBT right now, which I hate to say, but it is incredible. Yeah, no, you, you're right. 
David M.: What's a luxury? You can't live without air conditioning. If you could trade places with someone for a day, who would it be?
Daniel McGarry: Presently, it'd probably be Mark Dag note from the Oklahoma City Thunder, their head coach. Yeah. Just to stand on the floor for an NBA finals game one time. That'd be awesome. What's the best piece of advice you've received? Ask why, until you can answer the question in one word. 
Jon Bumhoffer: Hmm. 
Daniel McGarry: So what is your favorite city and why? New York City. If we're talking about America and just because of the allure, I think everything that you can do there, there's, I mean, we went there just for our anniversary a couple weeks ago and we didn't have any plans and we walked around for six hours and it was one of the best days I've ever had up there.
Steve Carran: That's awesome. That's great. So now we're gonna get into your background a little bit more, kinda where you grew up and what makes you tick. So you grew up in Edmond, Oklahoma, is that right? That is, yes. So how did growing up in Edmond, Oklahoma shape you into who you are today? 
Daniel McGarry: Oh man. I think the Midwest hospitality phrase really kind of carried over into my entire life everybody's so nice there and welcoming. It's just I wanted to be in a position to do a job where I could be nice and welcoming to everybody. And I guess really just the phrase Midwest hospitality. 
David M.: So you went to Fort Lewis College, you got your degree in business administration and management. How did you end up at that school and what really led you to to looking at that degree? 
Daniel McGarry: So it's actually a really funny story about how I picked this school. We were traveling through the Denver International Airport. My family and I used to come out to Colorado all the time to go skiing, and we just saw a banner for it and really literally sat down on the plane, got home, applied to go there, and then the decision was made once we saw the campus. It's beautiful. It was small. All the classes were really intimate. It was a very easy choice. 
Steve Carran: Very cool. So you've been selected as an HSMI Rising Leader. You've been selected for the HSMI, rising Leader Council for Revenue Optimization. Can you tell us a little bit more about this and you know, what you've learned so far?
Daniel McGarry: Yeah, it's been truly an incredible honor. My present VP at CoralTree, Dana Cares, helped get that set up for me, which I owe him a ton for that. I have learned so much so far from it. It's really interesting when you work with, uh, specific management companies or groups of people, everybody thinks somewhat similarly, and then when you get to see so many outside influences and people from different disciplines that impact revenue performance, get to be on that call and it's truly eye-opening just to, you know, get to see so many different perspectives, thoughts, strategies. One way somebody interprets a sentence is completely different than the way somebody else does. And that completely changed a couple of the presentations I've given since actually having them with HSMI. 
Steve Carran: Very cool. So now we're gonna get into your career how you got to Magnolia Hotels. So you got your background working at a camp as a camp counselor and in restaurants before graduating college. What did you learn in those earlier days that you take with you today in your current role? 
Daniel McGarry: Camp counselor's a bit of a funny term because it was for Camp Bow, which is a dog daycare, so probably not the camp counselor everybody's thinking of. But honestly, much, much more fun. Um, that's funny. At least for my love of dogs.
I would say, again, it's just the service industry there. You know, I worked at Outback Steakhouse right after my camp counselor days at Camp Bow Wow. And learning to serve people and just getting to interact with so many different people every day was really, really incredible. I did service industry pretty much my entire life before actually going to work for Vail Resorts. And then finding out about revenue management. 
Steve Carran: That's great. Was that theme song for, uh, the, the dog park, like low Bow Wow. Or something like that? 
Daniel McGarry: It was, every time I walked in I was definitely playing in my head. 
David M.: So that's a good segue. So after college, uh, you worked at Vail Resource, you worked your way all the way up to the branded revenue manager. How did you get or excited about revenue management as far as that, that kind of lane in hospitality? 
Daniel McGarry: Yeah, so I first started at Bay Resorts as a kind of reservation supervisor. Um, and this actually happened by driving around to the different job fairs that Bay Resorts had out there. Growing up in Oklahoma, I mentioned a little bit, my family always went out to Colorado for vacations and my parents would always say, what do you wanna do when you grow up?
And I just said, I wanna work for Vail Resorts. I just wanna be in Colorado. I wanna work for Vail. They've given me some of the best experiences I've ever had. Um, and then when I was doing reservations, we started to get more into the data. As you know, time evolved and data became more available. Got to work closely with some revenue managers whose brains were just inspiring to me.
The way they think about business is completely different than I did on the selling side from a reservation standpoint. And then there was one who kind of took me under her wing, gave me a couple books to read. I applied for revenue management probably five, six times, um, at Bay Resorts before I was able to get on there.
And I had an in incredible, incredible mentor. Um, John Scott. Who, you know, gave me the book, Moneyball. We interviewed and talked about Moneyball and how that related to revenue management, and then the rest is history. From there, I just fell in love with the numbers, the data, almost the instant gratification of seeing a strategy shift be successful.
Steve Carran: That's very cool. So, from Vail, you went to Stonebridge, then Sage Hospitality, and in 2023 you were awarded the Rising Star Award at Sage's Yearly Leadership Conference. What do you think are some of the keys to being a successful revenue manager? 
Daniel McGarry: Ooh, it's a great question, and I think that changes too, um, with kind of how our business is going right now. I think the biggest one is being a good storyteller. Um, we have so much data. Revenue managers have so much data, revenue analysts have so much data. Sales does. But being able to be the person who can take that data and turn it into a compelling story or a call to action, I think that's what drives a really good revenue manager.
David M.: So now you're the area director of Revenue Strategy for Magnolia Hotels. Steve and I are, our careers have been focused more around the independent hotels. So for those who might not be fa familiar with Magnolia, can you tell us a little bit more about it and what makes it unique? 
Daniel McGarry: Yeah, so I presently have four Magnolias. One is an independent in Omaha, Nebraska, and then we have three Marriotts. I think the most unique part about the three Marriotts is they're all tribute brands. Um, so historic buildings and really, really cool locations. I think the thing that makes Magnolia most unique and full transparency aside from the buildings is the teams that have been built there, truly incredible people who are excited about doing their job every day and excited to interact with every other person on the team. I know a lot of companies say it feels like family, but they really live that. You know, they text you every night, not just about how revenue management's going or how many sales we close, but you know, what did you have for lunch that day? I think the people at those hotels are really what makes them the most unique. 
David M.: I have a quick, quick follow up question. So are you finding that that. More and more of the branded hotels that feel like independence are getting more leeway to be more independent. I don't know if that makes sense, but I feel like you go to some of the autograph collection hotels and things of that nature and it feels they have a really strong independent feel and you don't really see Marriott in the forefront.
Daniel McGarry: Yeah, I think that Marriott will always be an incredible, incredible brand and is driven mostly by their, their bonvoy and having such incredible guest retention. Um, I do think Marriott's doing a really good job of shifting, like you said, to be somewhat more independent, right? Or I guess more unique in their offerings, all the different soft brands that they have, and putting the soft brand name first rather than the actual Marriott brand name first.
I think that's been a really good driver differentiator of making all the different classes that they have and the people or the consumer who want to come, you know, not just going to a, I think when I first started, you think of Marriott, you think of a giant 10,000 conference room hotel, right?
Right. When you go stay at a Moxie, you're not necessarily saying that, I'm gonna go stay at a Marriott property. Like you're gonna go stay at a Moxie, which is really cool, unique. Then same thing with tributes. You know, you go stay at a really cool historic building. So yeah, I think they're doing a really good job of keeping the Marriott brand loyalty and all the lifetime value that comes with the guests of having rewards and, uh, the experience and the lifetime statuses that they get, but also pushing out their soft brands and letting the soft brands run and kind of find what works in these different markets.
Steve Carran: That's great. So now we're gonna move on to the thought leadership part of the podcast. So you and I met in Orlando, and while we were there you were giving a talk on the evolution of revenue management and hospitality. Can you give a bit of an overview about what that talk was about and what you're seeing as the E.
Daniel McGarry: Yeah, I mean, to sum it up, the evolution's been dramatic, right? We went from back office spreadsheets and gut instinct to real time data-driven strategies In the early days, you know, revenue management was really, really reactive. I think I used the metaphor, um, when I was on the stage there about like trying to drive a car forward while looking in the rear view mirror.
It works sometimes, but it's really, really dangerous to perform that way or to drive that way all the time. Today, it's more about strategy. It's proactive, it's predictive, increasingly personalized. You know, I think that the biggest change has been the amount of data that we have and the ability to wrangle that into future strategies.
David M.: Yeah, so it's funny. So those are watching or listening, just some quick, you know, funny things about revenue magic. In the early days of Revenue Mag, what that meant is you would drive to another hotel and see how many cars were in the parking lot, and that would tell you how full the hotel was. And then.
In the nineties I worked for hotels and we'd call up other hotels and just ask them if they were sold out and things of that nature. So where do you see ai, everybody's talking about it, automation. How is that gonna impact revenue management teams, do you think? Moving forward? 
Daniel McGarry: I think, and I say this without exaggeration, any exaggeration, it changes everything for revenue management teams.
It's already helping us digest massive amounts of data faster than any human can. Moving forward, I think we'll see revenue managers shift from that tactical pricing to more of a strategical storytelling standpoint. Automation's gonna handle all the button pushing as long as you keep your data clean and feed the correct data and information into the system.
So instead of gathering cleaning data, we're gonna be interpreting data scenario planning and flu and commercial decisions. So I think the real question becomes after the AI evolution continues, I won't say starts, it's definitely already happening, is how do we structure our teams to unlock the new strategic capacity that we have with our human capital?
You know, it's not just about replacing those manual tasks, it's about unlocking our human bandwidth to tackle higher impact challenges, which could be brand differentiation like we talked about earlier, total asset performance, and then that long term guest value. 
Steve Carran: This is kind of a great segue to that. You know, we've talking about how much data there is now in revenue management than in the past, and recently you've been talking a lot about signal versus noise and really sharpening the focus in a world of data overload. Can you elaborate a little bit more on that? 
Daniel McGarry: I think this comes kind of with present climate of what's happening in the world. All of the news we get today, it's, you know, hotels are gonna start doing terribly and they're like, oh, actually they're doing really well. It's just in the lower segments that are doing great or different areas of the market. I think in general, you first have to define signal and define noise, and a signal to me is an actionable piece of information that changes something you do today.
And noise is something that masquerades as a signal with urgency, but it doesn't change any of the business direction that you get ultimately to be able to kind of define or change signal versus noise. I think it comes down to having established KPIs and goals that you're trying to achieve for a hotel. Gsoing back to what we learned on hs, AI's Rev rising revenue. Somebody had told me on there, you know, signal can become noise and noise can become signal if you don't go into your massive amount of data. Trying to find a specific piece of information or KPI you're looking for there's so much available today.
David M.: What tools or technologies do you find the most effective for helping you with the revenue management, real time pricing forecasting? What are, what are, what are your suggestions? 
Daniel McGarry: I would say whatever piece of information fits the most with your specific tech stack having Marriotts and having independence, I have quite a few different ones, you know, one yield is great, ideas is great. All of those Duetto I've heard, it's incredible. I haven't worked with that in a long time either. But I think the most important piece, and this is something Coral Tree has done really, really well. Is consolidating all of that data into something that is actionable.
So whether you have an incredible report that comes outta your PMS, if it doesn't go into something you can roll up to find a trend, that's not gonna be very impactful. So I think all of these incredible tools, the biggest and most impactful ones are gonna be your Tableau, your Power bi, where you can change the views that you're looking at to again, find that specific nugget of information that will be very impactful and drive change immediately.
Steve Carran: You bet. You bet. So you are working with, you know, other departments of the hotels with sales, marketing. How are you ensuring that there's alignment between you and those teams that so you hit your strategic goals? 
Daniel McGarry: Yeah, I think alignment happens mostly when we shift from siloed KPIs to unified commercial outcomes that was something I talked about in Orlando as well as kind of the evolution of revenue management is going towards the commercial services team more. You know, we've met moved away from measuring success in isolation, whether that's sales, hitting a number, marketing, getting a number of clicks going, or revenue optimizing RevPAR.
We're aligning all those functions around shared metrics like contribution margin, net, a DR, cost of acquisition. Um, so revenue goals can't live in a silo. Every single person needs to understand what optimal mix is. Everyone needs to know what we're targeting, who we're targeting, why we're targeting them.
So my experience, the most effective approach is regular cross-departmental cadence, whether that's weekly, bi-weekly, everyone comes to the table, and it's not to defend your viewpoint, but to align on the outcomes. So data transparency is a big part of that as well. If everyone's looking at the same dashboard, it's easier to unify your strategy and rather have that come across as a strategy rather than an opinion.
So when sales marketing, and revenue are all aiming for the same profitability, target, the same mix of sales, the same cost of acquisition, that not just volume, that's when it's a game changer. You know, we all look at the right side of a Star report first. You know, the Total Hotel Rev, our performance. I don't care if I get there with the Zero Transient Index, as long as our group is, you know, overselling the hotel or getting to, you know, our fair share or vice versa.
If we have a rough week in group, as long as transients able to help, every single person has a hand in that cookie jar. 
David M.: So I love your story, how your travel led you to your university. It led you to the company that you wanted to work for. So what advice do you have to people who are looking to get into hospitality and specifically hotel revenue management?
Daniel McGarry: Be curious is the number one. Obviously I'm very biased towards revenue management, but I think it's one of the few fields that every decision you make impacts every single person in the hotel, whether it's housekeeping, your barista, um, your financial officers, your sales team, any of those people. All of the best revenue leaders I know are, I would almost say.
David M.: Obnoxiously curious, right? 
Daniel McGarry: If you start by understanding the basics of forecasting, segmenting, distribution, learn to tell a story with the data, again, I think that goes back to what we were talking about at the beginning. That's the, the most important part. But if you don't understand from a revenue management standpoint how charging a $50 rate on a week is gonna affect your total hotel.
That's not gonna be something to, that's very good. So I think just learn the hotel beast first and then just continue to ask why over and over and over again. 
Steve Carran: That's good advice. Great advice. So Daniel, if we have been asking you the questions this whole time, so this is a part of the show where we turn the tables and let you ask David and I a question, 
Daniel McGarry: what is the most exciting trend in hospitality you've seen right now?
Steve Carran: I love where we're going. You know, I'm in Colorado like you were, so I think we're gonna agree on this, like the outdoor experiment, experiential hospitality trend where, you know, it's not only going outdoors, but it's going, experiencing the wild. Maybe you're staying at a resort that has, you know, the cooking to that, to the state or you know, what's unique to that area.
But, you know, I love going outdoors. I love staying in hotels that have kind of that outdoor. Experience. So that's kind, been kind of my favorite thing In a few weeks. I'm actually going to stay in a, in a dome in, uh, Wyoming. So like I love those kind of new kind of stays and trends that we're seeing in the outdoor space.
David M.: Yeah, I would say, I think it's, you know, it's kind of what reason why I think I asked you the question earlier about Marriott independence. I just kinda love this feel that people are embracing this kind of, it's not just a, a place where you sleep, there's an experience, there's something to do. What makes it memorable?
What makes it different? Uh, so for me, I like that finally, and, and I say finally. I know a lot of hotels have done it, but I don't think enough that hotels are embracing that. It's not just a place for people to sleep. It's about the experience on property, what's happening. Steve and I always talk about local attractions and things of that nature.
So for me it's almost like it's that little bit of a nudge for people to get out and go travel. It's like you're not just gonna go somewhere to sleep. You're gonna experience something that's. Completely different. And yeah, that's I think one of the reasons why early on, I loved traveling to other countries because there's a lot of similarities, although they're different to Boston, New York, Philadelphia, Baltimore, once you get outside of the country, the uniqueness is what's kind of cool. So I like the fact that people are starting to embrace the independent type feel. 
Steve Carran: Man. Did we just get through a trends topic without bringing up ai, man? Yes. That's crazy. That's crazy. I was waiting for one of you to say it.
Yeah. Well that was great. So we have one more question before we get you outta here, Daniel, our producer, John has been listening the whole time, so we're gonna kick it over to him for one more question. 
Jon Bumhoffer: It was really cool to hear about kind of your whole journey in revenue management and uh, you mentioned, uh, and Steve asked a question about the evolution of rev revenue management.
I'm curious, like what are the things you touched on a little bit, what are things that you're most excited about or you're most looking forward to, like with revenue management in the future? Um, is there anything that you're kind of looking to in that space? 
Daniel McGarry: Absolutely, yeah. And I think aside from just the evolution and commercial services is the ability to be totally profit driven. I believe that someday the title of revenue management will change to, you know, revenue strategy or profitability strategy. And that's gonna come down to pricing, f and b, pricing, those experiential services that you were talking about, David. Um, and just being able to truly have a total hotel standpoint rather than trying to sell a room on a specific day.
I think we're gonna see a big, big jump into. People having the data to be able to find optimal mix from a transient standpoint that helps with your f and b contributions are same on the group side. And I think it's just incredibly exciting to see all the data, all of the new trends and the tools AI helping as well with that.
For a revenue manager to be able to sell a $60 room, knowing that ancillary revenue's gonna come in at 6,000 for that, obviously a very, very crazy example. But to be able to shift from more of a star standpoint to looking at RevPAR to the the par. 
Jon Bumhoffer: Yeah, so like, just kind of follow up. It's a very much more holistic view, mixing in those experiences, everything that you, you know, the revenue management and strategy affects all different areas, not like you said, just the room, the room price. 
Daniel McGarry: Absolutely. Yeah. And I think we'll have a hand in guest retention. You know, a guest who comes back is gonna be somebody who spends more money the next time. Um, and that can all be done with how you first bring them in. And I think revenue management gets to work a lot closer with e-commerce on that side now too which is incredibly exciting for us to be able to, you know, be involved in the guest acquisition side, which is very, very not standard from when I had started Revenue management. 
David M.: Well, that does it for another episode of The Modern Hotelier, Daniel. This is the part of the program where you get the plug away, let people know how they can either get in touch with you or how they can find out more about Magnolia, the Floor's yours.
Daniel McGarry: Please feel free to reach out. That's daniel.mcgarry@magnoliahotels.com we have some incredible sales teams who would love to get you some group books here. We'd love you to come stay at our hotel as well, so please feel free to email. We can get you the best rate we possibly can. But yeah, thank you guys so much for having me, it's been been really incredible. 
David M.: Thank you. Well, that does it for another episode of the Modern Hotelier Hospitality's Most Engaged Podcast. Whether you're watching or listening, we appreciate you and we hope to be with you again soon. Thank you, Daniel.
Daniel McGarry: Thank you guys. 
Steve Carran: Thank you.