Yield Management is a sales optimisation technique based on 3 fundamental elements:
- fixed inventory
- perishable product
- fluctuating demand
Because a hotel has a certain number of rooms built (fixed inventory), that these rooms – if they are not sold tonight – are lost (perishable product) and that demand is variable that Yield Management techniques can be applied.
It’s easy to see that it’s better to sell for less than not to sell your room at all. But beware of misconceptions: Yield Management does not always mean lower prices. In some cases it does, because an empty room costs us a lot (opportunity cost), but in other cases, where demand is predictable and on target, Yield Management can increase the average selling price.
The classic definition of Yield Management is the practice of enabling a company to sell :
- the right product
- o the right customer
- at the right time
- at the right price and
- for an appropriate period of time
With the aim of optimising product price and availability to achieve maximum profitability.
Yield management by optimising occupancy in slower periods and optimising the average price when demand is there are two levers that contribute to the development of RevPAR, Revenue Per Available Room.
Yield Management integrates a set of pre-compiled and organised information to facilitate decision-making.
Any hotel can implement a Revenue Management strategy. Yield Management even works for bed and breakfasts! You don’t have to have 4 or 5 stars to use Yield Management. A 2-star or 3-star hotel can also be optimised.
First of all, to implement a Revenue Management strategy, it is important to carry out an audit of the hotel’s situation.
- My location? What’s it like?
- What condition is my hotel in? Is it well maintained? Is it ageing?
- What makes my hotel different from the others?
- What are my strengths and weaknesses?
- What is the state of my e-reputation?
- Who are my competitors? What are their strengths and weaknesses? How do they sell?
- What condition are my management and distribution tools in?
- Is my PMS adapted to Yield Management?
- Is my booking engine adapted to Yield Management? Does the hotel have a good Channel Manager?
- Is my website up to date? In terms of photos, information and techniques…
- How well is my website referenced?
- Does my website convert properly?
- etc…
Revenue management without a good website or with a mediocre e-reputation will not have the desired effect. This is why a general audit of the hotel product, its level of quality and all its marketing tools enabling it to be visible on the various markets is essential as a preamble.
Once the audit has been carried out, the dynamic pricing grid needs to be put together using Revenue Management techniques, existing tools need to be adapted, and a Revenue Management Tool (RMS) needs to be put in place.
The practice of Yield Management begins with a theoretical knowledge of the practice of Yield Management. Experience on the ground in a hotel, in the reservations department, is an asset, but it is not enough to practise Yield Management correctly. The first step is to adopt the Yield Manager’s philosophy, which is to constantly look for opportunities to increase sales, followed by practical Yield Management techniques.
Why implement a Revenue Management Software (RMS) or Yield Tool? Yield management involves analysing customer behaviour during the booking process. This involves processing and analysing data which, thanks to the tools put in place, will enable the information to be organised for greater efficiency in terms of analysis and decision-making.
The art of the Yield Manager is his ability to read load curves and understand the multitude of information they contain, enabling him to plan ahead, anticipate future demand and develop a strategy of rate variations.
PMT Hotels was founded in 2010 and specialises in hotel development and repositioning. Among its areas of expertise, PMT Hotels has become a leader in Yield Management thanks to its multi-market experience, the Yield Management tools it has developed (R.M.S.) and the results it has achieved with small and large capacity independent hotels, both budget and upmarket. PMT Hotels is regularly consulted in the business press (Figaro Economie, Le Nouvel Economiste, l’Hôtellerie-Restauration, etc.).
PMT Hotels advises and supports hotels in their plans to open, reposition or, more broadly, question their image.
PMT Hotels offers high-level Yield Management training, exclusive to the hotel and in line with the company’s strategy. These courses are attended by the company’s decision-makers. This 3-day training course will enable you to acquire the components of Yield Management while having identified all the levers for developing the hotel’s turnover. These levers may be new sales opportunities in relation to the Product, adapting certain practices, seeking optimum commercial consistency, removing certain barriers that create friction at the time of sale, etc. We work throughout France, in the French overseas departments and territories and abroad.
Phone number :
Paris : +33 1 84 20 42 42
Nice : +33 4 84 25 09 76
