Yield management in hotels: A successful hotel has to master the art of offering the right thing to the customers at the right time and at the right price. Price optimization is also an important factor that hoteliers need to be concerned about. And to optimize the price at its best they have to comprehend the customer’s behaviour and spending patterns and propensity.
Two vital things that hoteliers need to keep in mind for a successful hospitality venture are one – satisfied guests and two at the same time optimized pricing. To achieve these two things, one needs to learn the nuance of yield management in hotels. In this regard, let’s throw light on some facts pertaining to yield management and how it benefits hoteliers.
What does yield management in hotels refer to?
Yield management is a kind of strategy which aims to get the maximum price for the rooms. In simple terms, this technique is popularly used in the hotel industry where the hoteliers sell the right rooms at the appropriate price to the anticipated guests with a motive to maximize the revenue.
The yield management only empathizes on two things one is the price of selling the hotel rooms and sales volume. Thus the practice of yield management in the front office make the directors, front office executives, sales professional to target particularly the sales period and schedule development programs that will help to increase the revenue.
A simple example of yield management.
Let us elaborate on one of the yield management examples for better clarification on the topic. Suppose you have a hotel near the holiday/ tourist destination, and you know that it is the peak season lots of tourists will be coming to this location.
You see that your hotel has the best vantage to the nearby the major sightseeing places, so you may decide to charge a premium for the rooms than you charge usually highlighting this USP in your marketing communication and thereby building not only traction but also an added value for money.
Some highlighted benefits of yield management in Hotel Bookings
To get a detailed idea of how to maximize revenue and to comprehend the pattern of hotel bookings we need to lay stress on yield management. Here we pick some ideas on the importance of yield management in hotels.
- Stay away from redundancy
With the help of the well-devised yield management in hospitality, one can precisely learn how to premeditate the supply and demand chain. Now such pre-understanding will help the hoteliers to stay away from redundancy while fixing the price for the hotels.
- Escalating hotels revenue
Yield management in hotels is no doubt a boon for the hoteliers because with this strategy the hoteliers can make the right use of their occupancy. In fact, it does not matter to them whether the occupancy is a hundred per cent or not. In this regard, the hoteliers can take the help of RevPAR, as this helps you to guess and fix a price on the available hotel rooms each night.
Also, keep in mind that the rate does not vary much like the demand. Hence hotels use the tactics of keeping the room’s price high during eventful seasons, now by doing so they sell the rooms at a price higher than usual. Thus in this way, they escalate the hotel’s revenue.
- Comprehending the pattern of booking
Yield management in hospitality also helps hoteliers to have a clear notion regarding the booking patterns of the target market because each customer books differently. Some book within short notice while some prefer to reserve much before. Now in such scenarios, the hoteliers can reduce the price for guests who booked much earlier and can penalize guests who booked last minute by increasing the price.
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