Win or Lose? Dynamic Revenue Management

You're interested in increasing your revenue and getting more bookings, right? We're here to show you how to manage your revenue through revenue management.

Revenue Management Definitions

Revenue management is an inclusive term that describes the use of the following pricing techniques and tactics:

• Variable Pricing: the practice of assigning price based on different elements of value
• Dynamic Pricing: changes in price occur due to repeating events that affect supply and demand
• Yield Management: strategic price changes to match fluctuations in supply and demand

Basic Forms of Yield Management and Yield Pricing

• Higher rates on weekends
• Seasonal rates (summer, winter, holidays)
• Minimum night requirement (smart minimum nights)
• Sliding rates (longer stays receive a discount)
• Yield management (a paradigm shift in pricing)

Hospitality Terminology

• Rev: Revenue
• ADR: Average Daily Rate
• BAR/Rack Rates: Best Available Rate
• RevPar: Revenue Per Available Room
• Compset: Competitive Set Rates
• OCC: Occupancy

Check out our video on yield management here for more detail.

Don't reward your guests for booking late. Reward them and give them discounts for booking earlier with you.

Pros and Cons of Using Yield Management

Pros:

• Increase revenue
• More income
• Larger bank account balance
• Staying on the leading edge
• Improving/updating property

Cons:

• Offending customers
• Feels too "large property"
• I don't have time to use yield management or change my rates

Is Yield Management for you?

To get started, look back at your last two years.

• Is your occupancy over 70%?
• Do you run at 100% occupancy during certain times of the year? Weekends?

If so, you may want to consider using yield management.

In Conclusion

Automate your yield management. Don't be caught unaware in a situation where you're underselling your rooms. Yield management is where supply and demand meet for a fair price.