Hotel Front Office Management, 3rd Edition

168 CHAPTER 6: YIELD MANAGEMENT• Identifies the mix and price of bookings that will generate maximum profitsfor each hotel.• Accurately determines which customer reservation requests to accept andwhich to decline.• Considers competitive pressures and economic cycles with daily analysis andupdates.• Assesses the impact of prospective groups on overall property net revenueand provides guidelines on minimum room rates for groups.• Tracks planned and actual group block materialization and identifies deviationsfrom forecast.• Performs a complex optimization of data every night, processing every bookingtransaction and updating large forecast data sets.• Forecasts transients up to a year and half into the future. 6Components of Yield ManagementTo understand yield management, it is important that you know its interrelated components.Each part of yield management feeds into a network, which supports the goal ofmaximizing profit for a hotel.Definition of YieldPreviously occupancy percentage was presented as a traditional concept used to try toachieve 100 percent occupancy. Using this concept, a certain percentage of the roomsmay have been sold, but how profitable was this venture? For example, Table 6-1 showsHotel ABC which has 500 rooms. It sells 200 rooms at $80 and 200 rooms at $95 (rackTable 6-1. Occupancy Percentage ComparisonHotelNo. RoomsAvailableNo. RoomsSold Rate IncomeOccupancy%ABC 500 200 $80 $16,000200 $95 19,000400 $35,000XYZ 500 100 $80 $8,000300 $95 28,500400 $36,5008080TLFeBOOK