If you are an existing hotel owner or planning to become one, then it is really important how you manage the yield. This is professionally called Yield management in hotels. In order to clarify this term for you more closely, below we introduce you in more detail this term and its role in object management.
What is Yield management in hotels?
Yield management in hotels in professional translation means income management. In practice, this is defined as sales affected by the right price, the right buyer and the right time. So yield management is actually a strategy that determines the formation of correct prices at a given moment.
To avoid confusion, yield management is not the same as revenue management. Because this is only one segment of a complex income system.
What are the advantages of Yield management?
The advantage of yield management is that the system is based on calculation and statistical monitoring. If you correctly forecast the demand i.e. fullness, the chances of making a mistake are very small. This way, you get accurate data with accurate details, all of which provide the right information to accurately set the right price.
An even more important item with Yield management is what is primary for every owner, and that is increasing income. Thanks to this management system, income increases even when occupancy rate of facility is not 100%.
How does facility occupancy affect yields?
In order to implement this more efficiently, you need to monitor the occupancy according to the factors that influence the demand to be higher at a certain time of the year. That is, that in certain parts of the year the demand is lower.
You probably know that the year in the hotel is divided into two seasons: high and low.
The high season is what is the focus when making a strategy and raising prices, when due to certain events and dates there is an increased demand for your facility. Here the reason can be some events, festivals, vacation season, etc.
Based on these events that are repeated annually, you already have some assumptions about when you will raise or lower accommodation prices.
Of course, the location of your property plays an important role in all of this, because the more accessible you are to attractive locations, the more you can raise the price of accommodation.
Monitoring the competition
The fact is that during price formation you follow your yields in previous seasons and compare prices, but that is not enough. You also have to follow the competition, otherwise you may raise the price of the accommodation, while all the competitors keep a lower price. In this case, you lose the reservation.
How can the BHC team help you improve Yield management?
Many years of experience in managing accommodation in prestigious high-category facilities makes our team a relevant collaborator that will improve your business.
Feel free to contact us to schedule a meeting and find a relevant solution for your sales channels.
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