Question

Revenue management and yield management are essentially the same thing....but what is it? How does it relate to hotels?
Explain:
Fade rates
Rate category controls
Length of stay controls
Groups rates

Answer 1

Revenue Management and Yield Mangement are the two strategies in the Hotel industry that manager uses to maximize the revenue they generated from the guests by providing services.

Yield Management: It can be defined as a selling of a product or a service to a right customer at right time and at a right rate.

In hotel industry, Yield Management can be used as a process which helps in determining the price of a hotel room.

Revenue Management: It can be defined as a selling of a product or a service to a customer with best cost efficiency.

In hotel industry, Revenue Management is more focused on predicting the demand and optimizing that demand to boost the revenue.

Yield Management and Revenue Management are not same. we can say that Yield management is a subset of Revenue management.

As Yield management is deals with pricing strategies. It focus more on generating revenue from a available inventory. yield management is focus on maximizing revenue from hotel rooms only.

while Revenue Management has wider focus and is more strategic as it is more concerned for maximizing the overall revenue that can be generated by the hotel. It means that revenue management not only focus on maximizing revenue from hotel rooms but also focus on maximizing revenue by selling other services like food, laundry service.

Fade Rates: Fade rates in hotel industry can be defined as a rate that is officially proposed to guest for a service when a guest is resisting from reservation on exhibited price rate.

Rate Category Controls: Rate category control in hotel industry is used to calculate the charges for a room on a particular day. It also helps in ensuring the availability of inventory.

Length of stay control: It is calculated by diving number of rooms night by total number of booking.it also helps in planning of occupancy and in better optimization of that occupancy within a hotel.

Group Rates: Group rate in hotel industry can be defined as a booking that hotel accepted from a group at negotiated rate. These groups can be wedding parties, conferences, business association, corporate events.