YIELD MANAGEMENT

DAY 3
 YIELD MANAGEMENT IS ...

KNOWING THE HOTEL ’S BUSINESS AND

CONTROLLING IT TO MAXIMIZE
REVENUE AND PROFITS.
THIS SALES TECHNIQUE ...
• CAN BE APPLIED TO A PROPERTY
OF FIXED CAPACITY
• WHOSE DEMAND IS CLEARLY
SEGMENTED
• WHOSE DEMAND IS VARIABLE
• WHOSE PRODUCT IS PERISHABLE
• WHOSE PRODUCT IS SOLD WELL IN
ADVANCE
BUT YIELD MANAGEMENT IS
ALSO
• ACCURATELY FORECASTING THE
DEMAND FOR A HOTEL TO KNOW :
– HOW MANY ROOMS TO OFFER
– AT WHAT PRICE
– IN WHICH MARKET SEGMENT
– ON WHAT DAY
• IN ORDER TO MAXIMISE REVENUE
AND PROFIT
 5 STEPS TO YIELD
MANAGEMENT
• GATHER INFORMATION
• ANALYZE DEMAND
• FORECAST
• TAKE ACTION,
REFORECAST
• EVALUATE ACTIONS
 1 : GATHER INFORMATION
ABOUT :
• CURRENT STATUS
• HISTORICAL DATA
• COMMUNITY HAPPENINGS
• COMPETITION
• PACE
STEP 2 : ANALYZE DEMAND

MEANS :

SORTING THROUGH INFORMATION

WHICH
HAS BEEN GATHERED!
 THE DEMAND ANALYSIS MEETING
SHOULD BE ATTENDED BY ...

• GENERAL MANAGER
• SALES DIRECTOR (AND STAFF)
• FRONT OFFICE MANAGER (AND STAFF)
• RESERVATIONS MANAGER (AND STAFF)
• FOOD AND BEVERAGE MANAGER
WHY IS IT IMPORTANT TO
ANALYZE EACH DAY ?
– Everyday must be examined for its own
potential
– To highlight critical dates of high and low
demand
– At each meeting a new month is reviewed
– Yield is most effective when it is done before
any business is confirmed
 SO REMEMBER !!!
• Yield Management involves everyone
• The demand analysis team meets once a
day or once a week or at least once a
month
• It is important to look at each day
individually and the effect of each high
demand day upon the day before and
after
The 4C’s Strategy for YM

• CALENDAR
• CLOCK
• CAPACITY
• COST
 STEP 3 : FORECAST

Forecasting can be defined as the process

of analysing the number of rooms which
are actually reserved in terms of all the
factors which might change that number in
order to predict the actual occupancy.
 WHEN DO WE HAVE TO
FORECAST ?
• FORECASTS ARE PRODUCED :
– Daily for the next 4 days
– weekly for the next week to 10 days
– Monthly for the next 90 days
– Monthly for the next 365 days

THIS CAN CHANGE FROM ONE HOTEL

TO THE OTHER!!! OF COURSE!
FORECASTING TRANSIENT
OCCUPANCY ...
• Understanding the behaviour of the
transient segment is crucial to
forecast with accuracy

WHAT ARE TRANSIENT

CUSTOMERS ?
 FORECASTING GROUPS
• It is important to look at the group
business separately as they have trends
and pick up patterns of their own

WHAT ABOUT CUT-OFF DATES?

WHAT ARE CUT-OFF DATES?
PREPARING A FORECAST

IT IS IMPORTANT TO
ANALYZE THE ACTUAL
RESERVATIONS WHICH
ARE ON THE BOOKS
THE SAME NUMBER OF
DAYS IN ADVANCE
EACH TIME !
 STEP 4 : TAKING ACTION
• BUSINESS MUST BE CREATED:

HOW ?
- BRAINSTORMING
- MAKING AN ACTION PLAN
- GIVING RESPONSABILITIES TO EACH
DEPARTEMENT
- ENSURE THAT EACH EMPLOYEE IS
AWARE OF THE PLAN AND THE
GOALS
 STEP 5 : EVALUATE
ACTIONS

THE DECISIONS WHICH HAVE BEEN

MADE MUST BE EVALUATED