Hotel Industry & Yield Management

Examines theory & practice of maximizing revenue in all time periods, despite changing demand, applied to hotel industry. Pricing, location, competition, computers, marketing, more.

Yield management is the balance of selling limited and perishable inventories at the right price to the right customers. This means that a single commercial airplane flight can have many different prices based on the needs of the travelers involved and when they purchased their ticket. Hotels can have guests paying different rates for essentially the same room, and even hospitals are competing in ways that not only boost their occupancy rates, but their overall yield results.

Initially begun in the hospitality industry, yield management can be incorporated into other related industries where the conditions are right. However, there is the potential for problems if managers focus exclusively on yield management instead of building into their overall strategic plan.