CONTENTS:
1. Introduction 3
2. Revenue Management 5
3. Need for Yield Management 6
4. Inventory Allocation 7
5. Volume Relationships 9
6. Conclusion 11
Yield Management Page 3

Hotel:
A hotel is an establishment that provides paid lodging on a short-term basis. The provision of basic accommodation, in times past, consisting only of a room with a bed, a cupboard, a small table and a washstand has largely been replaced by rooms with modern facilities, including en-suite bathrooms and air conditioning or climate control. Additional common features found in hotel rooms are a telephone, an alarm clock, a television, and Internet connectivity; snack foods and drinks may be supplied in a mini-bar, and facilities for making hot drinks. Larger hotels may provide a number of additional guest facilities such as a restaurant, a swimming pool or childcare, and have conference and social function services.

Hotel revenue break down:

Revenue breakdown for full service hotels:

Cost & expense breakdown for full service hotels:

Revenue management:

It is an art & science of predicting real time customer demand to determine the optimal price & availability of a product.

Or in laymen terms we can say selling the right product to the right customer at the right time at a right price thereby maximizing the overall revenue.

In hotel industry yield management is done by the rates the hotel will charge & the no. of rooms available for each rate based on projected occupancies for a fixed period.

This pricing is based on the elasticity of demand for selected customer segments.

Yield = (room night sold x actual avg. room rate)

(roomnights available x room rate potential)

Take a look at hotel functions:

Director of market/revenue strategy

Yield Management

Page 4

Inventory management

group strategy/ business evaluation

Revenue analysis

Property sales & event management- sales & implementation

Therefore we maximize