Boost Yield

Profits
Management

Costs Down GROUP 2

DONABELL R RAPI
Business Focus PAMELA ESGUERRA
WILFREDO MOGADO
What is Yield
Management?
 A room that is not booked for the night is
lost revenue.

You cannot sell it twice the next day.

The hotel room is a perishable product.

- A dynamic pricing policy

- A tool to support daily commercial

decision-making

- A method to increase profit margins

- A way to improve the occupancy rate of

the hotels, and so to improve the revpar
(revenue per available room)
To sum up. . .

- Anticipation

- Customer segmentation

- Communication
How to increase profits

with Yield Management?

When there is a high demand :

High or low demand…

What do I have to do ?
A “rate control”; The lowest rate is withdrawn

A “stay control”; The guest needs to stay a minimum number of nights.

To increase the number of rooms at reduced rates

You can offer interesting price conditions

Customer segmentation

When there is a low demand :

Why then implement a Yield Management strategy ?

 When the economic situation becomes difficult.

 When the market is increasingly competitive.

 When you want to develop marketing channels and real-time online

reservation.

 When you want to enhance price transparency on the

internet.

 Every hotel is looking for optimization.

The different steps you need to implement a Yield
Management strategy :

Understand your customers

Analyze their needs

Analyze your market and your competitors

 The SWOT analysis

“Strengths” “Weaknesses” “Opportunities” “Threaths”

“The booking limit”

“The day limit”

“The close limit”

“The upselling”
To sum up. . .
- Create a rate plan for each type of day

- Analyze the hotel’s history day by day and year by year

- Evaluate the possible number of reservation requests per day and per rate

- Understand your different customer’s needs

- Decide on day limits and /or upsellings

“If you constantly chase
cost reduction, you will
ultimately wear the
system down into total
failure.” – John Carrier