Hotel Yield Management

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Hotel Yield Management – Educational Kit
INDEX INTRODUCTION GENERAL OVERVIEW 1. INTRODUCTION 1.1 The Changing Marketplace 1.2 The Paradigm Shift 1.3 How To Measure Business Performance 1.4. The Management Problem 1.5 Yield Management Users: The Current Situation 1.6 Today’s Limit In Applying Yield Management 2. WHAT EXACTLY IS YIELD MANAGEMENT 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 The Yield Management Definition The Trade-off Between Rate and Revenue The Revenue Impact Of Rate Differentiation Market Segmentation And Fencing When Do Segments Book The Information Problem Hotel Yield Management Objectives The History Development 03-12 13 13-14 14-15 16-17 17-19 19-21 21-22 23-24 24-25 25-26 26-28 29-30 30 31-32 33 33-34 35 35-36 38-39 39-43 44 45 45-47 47-49 50-53 53-56 56 56 56-61 61-62 62 63 63 64 64-65 63 66-67

3. PRECONDITIONS FOR THE SUCCESSFUL APPLICATION OF YM 3.1 Basic Yield Management Requirements 3.2 Yield Management Benefits In View Of Property Types 3.3 Basic Yield Management System Requirements 4. TYPICAL YIELD MANAGEMENT SYSTEM LAYOUT 5. THE YIELD MANAGEMENT CONCEPT 5.1 5.2 5.3 5.4 The Yield Management Control Dimensions Methods Of Capacity Control Yield Management Decision Support Tools Forecasting Techniques

6. RESERVATION CONTROLS 6.1 6.2 6.3 6.4 6.5 6.6 The Sales Control Toolbox Overbooking Physical Inventory Optimal Inventory Allocation Rate Classes Duration Control How To Manage Group Requests Managing Product Inventory

7. RESERVATION SYSTEM TOPICS 7.1 Separate And Nested Booking Classes 7.2 Virtual Nesting Structure 7.3 Hotel Yield Management: Where are we going


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8. HOW HOTEL ROOMS WILL BE BOUGHT & SOLD TOMORROW 8.1 8.2 8.3 8.4 8.5 8.6 The Communication Highways Reservation Processing: Manual versus Total Access Electronic Distribution Distribution Channels & Cost Control The Difference Between Hotels and Airlines Final Remarks – Outlook

68 68 69 69-73 73-74 74 74-75 76-77 78-81


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A silent revolution is taking place in the lodging & travel industry, affecting the way companies are managed and operated in a progressively deregulated economic environment. The concept of the great importance of information management relative to the traditionally leading role of operations management, accepted today in most industry sectors around the globe, is finally beginning to penetrate the lodging and travel industry too. Information & decision technologies have arrived to assist service and lodging industry decision makers in meeting the challenge to stay competitive, and indeed thrive, in this competitive environment by taking advantage of state-of-the-art developments in new technology, operations research, and management information systems (MIS). The lodging & travel industry generally and in particular American air carriers, have been motivated by deregulation policies and marketplace pressures to develop new decision support systems and demand driven inventory. Management systems to improve their bottom line. Four main areas of information management applications, supported by current technology developments and a new, marketing and customer demand driven management culture, have been identified in playing a leading role in growing accommodation booking volume, revenues and an overall improvement of financial results: • Marketing automation and product distribution through computerised reservation systems (CRS) and communication networks. • Overall revenue growth and customer service quality improvement through Guest History and Marketing Databases. • Executive information systems and customer databases to improve customer services, and to enable early problem identification and proactive distribution cost, revenue and targeted marketing management. • Minimising denials and revenue losses through yield management systems and concepts.

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