YIELD MANAGEMENT

YIELD MANAGEMENT

1. Yield

   • is the amount of revenue (money) gained from the sale of guest rooms

2. Strategies

   • that aim to maximise how many rooms are sold each night and to maximise the price paid for them.
     • The goal is to maximise yield.

3. Yield Management only works in industries, which have certain criteria:

   • • Their product is of a fixed capacity • Their product is very perishable • The demand for the product is variable and clearly segmented • Their product is sold well in advance

4. There are two main ways to control these sales

   • PRICE CONTROL
     • in a situation of strong demand you can command a higher price; conversely, in times of low demand the pressure is on to reduce prices
   • STAY CONTROL
     • A guest staying at your hotel for a longer time is generally better than one who stays just for a day or two over a peak demand period.

5. Factors

   • Time
     • we may mean how long the room is to be rented for, or what time of week/month/year it is to be rented, or even how far in the future it is to be rented
   • Purchaser
     • we mean on whose behalf will the room be rented - travel agent, individual, government agency, airline, company etc.
   • Conditions Attached
     • we mean if there are options for cancellation, deposit, package inclusions, executive services or other value added services

6. There are 5 basic steps in putting Yield Management into action:

   • FIRST STEP: Gather information
   • SECOND STEP: Analyse demand
   • THIRD STEP: Forecast
   • FOURTH STEP: Take Action
   • FIFTH STEP: Evaluate Actions