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Yield Management

The use of tools and business practices to maximize revenue. Yield management is a variable pricing strategy, based on understanding, anticipating and influencing consumer behavior in order to maximize revenue or profits from a fixed, time-limited resource (such as airline seats or hotel room reservations or advertising inventory).

Why is yield management important?

Yield management also allows hospitality businesses to focus on optimizing the pricing and selling strategy of their single most important resource – the rooms they have available. This allows hotel owners, for example, to get the basics of their business right, by maximizing revenue from rooms alone.

Is yield management and revenue management the same?

While talking about Yield Management for hotels, it only encompasses the revenue generated through the room charges or occupancy, whereas Revenue Management involves a whole lot more than just occupancy. Hence, yield management is not the same as revenue management, but it’s a subset.

What is the goal of yield management?

Yield management is a variable pricing strategy based on anticipating and influencing consumer behavior. The goal is to maximize revenue from a fixed, time-limited resource such as airline seats, hotel room reservations, or advertising inventory.

What the purpose of revenue management in the hotel industry?

Regardless of the type of hotel or the number of rooms that a given property has, an effective hotel revenue management strategy is necessary to success. At any given time, a hotel operator is going to be looking for ways to increase hotel revenue while also offering competitive hotel room rates. See the full article for more details.

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