What’s New in Hotel Yield Management Software

Not happy with your hotel yield management software package? Check out these new stars on the digital horizon.



IDeaS Revenue Solutions (Integrated Decisions & Systems, Inc.) isn’t exactly a new kid in the hospitality management and travel industry. IDeaS has been developing and refining its yield management software solutions for over 25 years. These aren’t just a ragtag group of software geeks whipping up a cookie-cutter software package; IDeaS is a worldwide company experienced with properties of all sizes.


The array of IDeaS software and services includes:

  • Pricing System—Uses advanced analytics and market insight to help hotel managers improve room pricing strategies.
  • Forecasting Management System—Has been honed into an invaluable tool that rolls recent trends, upcoming special events, and historical data into one user-friendly application.
  • Function Space Revenue Management—Helps hotel managers attract more group business and turn this into more than just one revenue stream.
  • Revenue Performance Insights—A data analysis tool that helps revenue managers sort mountains of data into reports that provide crystal-clear forecasting tools.
  • A Wide Range of Podcasts, Webinars, White Papers, and Videos—With these tools, learning to use the system will never be a lonely process.



Hotel yield management software takes a giant leap forward with i-Rates, a hotel revenue management system that uses algorithms to intelligently learn as you use it, therefore making customization effortless.


System components include:

  • Dynamic Daily Rate Calculations—To keep rooms priced too low from selling out and rooms priced too high from sitting empty.
  • Reporting Tools—These continually analyze room rates, the booking pace, and other parameters for comprehensive, detailed performance reports. Just a few of the types of data analyzed include the occupancy rate, average daily rate (ADR), revenue per available room (RevPAR), reservation patterns, group booking patterns, and all kinds of historical data.
  • Market Information—Gathers data about competitors’ rates so you can stay on top of pricing fluctuations.
  • Discount Management—Keeps an eye on the number of rooms available and determines the optimum booking channels for each room type.
  • Stay Restriction Management—Monitors booking patterns and recommends stay restrictions such as close-to-arrival bookings, minimum stay requirements, and more.
  • Inventory Control—Makes accidental overselling and underselling a thing of the past.
  • Upgrade Recommendations—Lets you know when an upsell, suggesting an upgrade, or a room type change could lead to higher revenues.
  • Group Management—Analyzes a group reservation and instantly suggests an optimal price point so you can give an accurate price quote without making the potential customer wait.
  • Corporate Account Management—Helps you offer the best possible corporate rate, and once that account has been landed, continually analyzes booking volume, what other revenue streams are impacted, and more.
  • Promotion Management—When you plan a special promotion, assists in forecasting profitability and its effect on occupancy rates.
  • Automated Function—Allows you to have room rate changes automatically executed through all booking channels.


Infor EzRMS

Like the name implies, Infor makes hotel yield/revenue management easy by treating a hotel room as what it is—a perishable commodity with a daily “expiration” date.


Among its many available modules are:

  • Database Tools—To provide maximum reporting flexibility.
  • Demand Module Algorithm—Evaluates property-specific forecasts.
  • Optimization Module—Helps you balance supply with demand.
  • Booking Channel Optimization Recommendations—Can be set to automatically send room rate updates across the board.
  • EzREGION—Modeled for regional and central management teams.
  • EzBUDGET—A day-by-day budget pattern analysis tool.
  • EzCOMPETE—Ensures your room rates are competitive across all booking channels.
  • EzQUOTE—Helps you analyze and offer optimum group rate requests.
  • EzCONTRACT—Keeps you from making potentially costly contract mistakes.


Need a hand with choosing a hotel yield management software package? Smart eHotels™ can help. Contact us today.

Yield Management Pricing: Business as Unusual

As anyone in the hotel business will tell you, there’s no typical day. Trends over time, yes. But knowing exactly what’s going to happen on any given day? No! Let’s face it: yield management pricing—the art of selling a finite number of hotel rooms to the right customer, at the right time, at the right price—is at best an educated guess, even with powerful software tools available.


Perhaps you’re thinking, “If yield management pricing is a shot in the dark, why do it?” However, consider the following:

  • Your resource (the hotel room) is perishable. If you lower your price in a misguided effort to fill rooms, you’ve shut out the customers willing to pay more, and you can’t recoup that profit later. It’s “expired” and doing nothing but negatively affecting your bottom line.
  • If you research your hotel’s booking history, you’ll have the basic knowledge to set optimum room prices for the future. You’ll know about how many rooms to offer to budget-minded leisure travelers, and how many to hold for business travelers who don’t mind paying full price.
  • While it might seem counterintuitive, it’s perfectly fine to let a customer go who is unwilling to pay full price, and hold that room for the customer who values your hotel’s combination of quality, service, and amenities.


The Bucket List

Unlike a retail store, which must charge the same price for the exact same product, you have the freedom to take what is essentially the same product (the hotel room) and offer it at different prices to different types of customers.


Going back to the previous example, you can divide your finite supply of hotel rooms into two “buckets”—leisure travelers (discounted rate) and business travelers (full rate). You can certainly categorize as many types of travelers you want and give each a bucket, but for the purposes of this exercise, we’ll just use two.


Let’s say you have 100 rooms to sell for any given night. The leisure travelers’ discount bucket holds 25 rooms, and the business travelers get a rack rate bucket holding 75 rooms. About two months ahead of a given date, say March 1, the leisure travelers have snapped up those 25 rooms allotted to them.


When the 26th leisure traveler calls, do you dip into the rack rate bucket and give them that room at a discount? In general, no. The discount rooms are full. Selling one more room at a discounted rate will cut into the healthy profit margin you need to stay a viable business.


As March 1 approaches, business travelers—who tend to reserve rooms closer to their arrival date—will reserve the rooms in the bucket reserved for them. Ideally, if you’ve done your homework by looking at past demand, all those rooms will sell to travelers who are eyeing the calendar more closely than their wallets.


Fast-forward and it’s February 28. Two rooms remain in the business travelers’ bucket. Do you break down and sell them to leisure travelers hoping for a last-minute discount? Again, no. You’re better off letting that room stay clean and ready to sell for full price the following night.


On the other hand, on the off chance your 75 business traveler rooms are sold for that night but your leisure bucket still has a room rattling around in the bottom, you should definitely expand the business bucket for that 76th business customer willing to pay full price.


To Learn More

Interested in this topic? Our series of articles takes a more in-depth look at yield management pricing. Click here.


If you desire personalized assistance, let Smart eHotels show you how yield management pricing can improve your hotel’s bottom line. Contact us today!

Hotel Yield Management: Timing Is Everything

Yield management isn’t a business concept that applies to every type of operation—only those with a finite number of items to sell. After all, a hotel has only so many rooms. Once they’re all sold, you’ll make no more profit for that night. A truck isn’t going to come replenish or add to your inventory, and you don’t have any more rooms stored “in the back” like a department store. Knowing hotel yield management techniques—and applying them at the right time—has the potential to increase your revenue with no (or very little) increase in costs.


Placing Your Bets

Hotel yield management involves taking little leaps of faith almost every single day. It means studying the booking history of your hotel so you understand how and when your typical customers make reservations.

For example, you may notice that leisure travelers tend to book further ahead of time than typical business travelers. You also notice that leisure travelers seem more price conscious and more likely to shop around. On the other hand, business travelers book closer to the date of their stay, and they’re more interested in amenities and location with pricing as a lower priority.

Because of these trends, it doesn’t make sense to offer a discounted room rate to all your customer segments, all the time. Why? Leisure travelers will snap them up, but where does that leave business customers who would have been willing to pay more? Booking with your competitors, that’s where.

So go ahead and offer the discounted room rate for leisure travelers who book six weeks or more in advance. However, set aside a block of rooms at the full (or at least a high) room rate for business and last-minute travelers.


How Many Rooms?

Predicting which customers are going to book and when is unique to each hotel. From experience, you probably know that business travelers will book during weekdays, primarily Mondays through Thursdays. More leisure travelers book for weekend stays.

Of course, there are always those travelers who don’t fit the mold—just-passing-through vacationers who could book any night, and business travelers who arrive a day or two earlier or linger a day or two later to enjoy the amenities of the area.

Let’s say you have 100 rooms available for any given night. Based on your hotel’s booking history, you hold 30 rooms for full-price/business-class type customers for Monday, April 1. By March 1, you’ve sold all your discounted rooms, and there’s still a month to go before April 1 arrives.

When the next leisure traveler calls looking for a less expensive room, do you relent and give the discount or turn the bargain shopper away? A lot depends on what time of year it is. If business conference season is in full swing, there’s no question. Hold that room for the customer who is almost sure to come knocking in a week or two, willing to pay full price. But if it’s a time of year when more vacationers than accountants are passing through, it may be a better choice to sell that room so at least it won’t sit empty, earning zero revenue.

This is why yield management pricing is somewhat like a roll of the dice. Who knew hotel yield management could be as exciting as a trip to Vegas?


It’s Not Rocket Science . . .

However, it can get complicated, especially when you start teasing out multiple customer segments, each with their own demand curve. Throw in a rewards program for frequent bookers, group bookings, and credit card vs. cash customers, and who can blame you for shopping for a hotel yield management software package?


Want More Information?

For a more in-depth look into yield management strategies, check out our five-part series starting here. Make the most of your hotel room inventory. Smart eHotels can help!

Hotel Internet Marketing Plan: CRM Software

Customer relationship management (CRM) software can be a valuable tool in building your hotel internet marketing plan. In a nutshell, CRM software helps you organize, automate, and synchronize sales, marketing, customer service and technical support.

CRM can help you track responses to specific marketing campaigns over multiple channels, such as email, chat rooms, social media, call centers, and direct mail.

  • It tailors responses based on customer input, web-based communication with customers, and call centers that answer questions and solve problems for customers.
  • It analyses customer activity so you can use a client’s history to design more effective, targeted marketing campaigns.
  • It’s capable of providing you with real-time customer data so you can develop nimble, high-performing hotel marketing campaigns.

Use The Right Program

There are many choices for relationship software available. How do you know which to choose? One key is knowing the difference between B2B (business to business) and B2C (business to customer) software.

  • B2B contact databases tend to be smaller than those of B2C.
  • B2B sales are relatively small compared to B2C.
  • B2C relationships tend to be of shorter duration than B2B.

What Makes A Good CRM Software Program?

  • Customized marketing for individual customers
  • Customer service that makes the customer feel they’re your top priority
  • Customer loyalty and retention
  • Giving customers information and tools they can use
  • Customer rewards for repeat business

Software Choices

A few of the most highly recommended CRM software packages include:

  • Salesforce.com – According to softwareadvice.com, Salesforce is reportedly one of the best CRM software packages for the hospitality industry.
  • ZenDesk – Lets the customer choose how they wish to communicate with you via the cloud.
  • FreshDesk – Frees up your staff to interact personally with guests and spend less time manually organizing customer information.
  • InfusionSoft  – Ideal for small businesses, which could make it perfect for a small or independent hotel facility.

Get started building a solid customer base from which to launch your next successful marketing campaign. We can help! Contact us today!

Hotel Room Pricing: Discount Strategies That Work, Part 2

In the conclusion of this two-part series, let’s look at a few factors that help you decide which hotel room pricing strategies are best for your business.

Picking the right pricing strategy at the right time isn’t as simple as pouring on the discounts every time there’s a hiccup in the economy or room demand dips. That doesn’t mean you shouldn’t offer discounts. Discounts are always an important part of your overall hotel room pricing strategy.


Room Price Segmentation
Segmented room prices attract certain customers to certain types of rooms at a particular time. For example, you know that a range of customers will all want to stay in your hotel during peak tourist season. Within that overall group, some of them are willing to pay more for a room that faces the ocean. Others prefer to pay less for ocean view. Still others are content to pay even less for a landside room.
In the same vein, offer discounts to those customer segments the same way. Reward brand loyalty rather than brand switching. For example, after a landside room customer books for the third time, offer them a free room upgrade to ocean view at an off-peak date the next time they return.


Pay Attention to Costs
Whenever possible, avoid using commission-based distribution channels to fill rooms during low-demand dips. Social media is a great way to get in touch with customers directly, and attract them to your website for direct booking.


Positioning Within the Market
How do you want your hotel to be perceived among your competitors? If low pricing is your only focus, then your aim is going to be having lower prices than your competitors. However, this strategy can backfire if your goal is to position your hotel as upscale/luxury. Discounting prices too deeply could have a negative effect on your hotel’s image, because the prevailing attitude among customers is that you get what you pay for.


Know Your Costs
You must have an accurate picture of your fixed and variable costs, and what it takes to cover your overhead and still turn a profit. This is no time to guesstimate.


Economic or Political Upheaval? Don’t Panic.
While it’s important to stay informed on local, regional, and even international conditions, it’s equally important not to overreact to gusts of economic and political winds. Stay focused on your target customers’ travel patterns. They may change, they may not, but if they do, keep your pricing strategy aimed at adding value for those customers, not just cutting prices.

Make SmarteHotels.com a strategic part of your hotel room pricing and marketing plans. Contact us today!

What’s New in Hotel Revenue Management Systems—Part 2

Continuing our look at What’s New in Hotel Revenue Management Systems, this time we cover two more stars on the software horizon, both traditional and cloud-based. Whatever your management style, there’s a software package that fits it perfectly. Even when you feel like changing things up a bit, these software systems help you keep from running off track in your quest to maximize your bottom line.

Here are a few hotel revenue management systems creating a buzz right now:

i-Rates is starting a revolution aimed at increasing your hotel’s bottom line. This innovative hotel revenue management system is based on what developers call “reinforcement learning.”

It’s almost like you have an intelligent being learning your hotel facility, your management style, and your customers to make sure every one of your rooms is competitively priced 365 days a year. You can adjust the degree of automation to allow for maximum flexibility, plus you can input your own data, which the system will then take into account for this and future dates. Any room rate changes are automatically transmitted to all hotel global distribution channels.


Another hotel revenue management system on the cutting edge, Duetto saves your hotel from the dreaded “room rate slide” that happens all too often when managers figure that simply offering cheaper rooms will draw more customers. Duetto helps protect your brand and your bottom line by keeping your focus squarely where it belongs – your target customers.

Using algorithms based on past history, the software quickly gives an accurate picture of future demand, allowing you to keep your target customers filling rooms during peak-demand periods while attracting new customers with special (but not artificially low) pricing during off-peak periods.

Unlike some other hotel revenue management software programs, it’s cloud-based so there’s nothing to download, upgrades are automatic and free, and the monthly fee you pay is often earned back in the form of a healthier bottom line.

Some of its productivity-enhancing features include block allocation management, event tracking, reporting of competitors’ rates, and web shopping data.

Let Smart eHotels help you choose the best hotel revenue management system for your hotel. Contact us today!

What’s New in Hotel Revenue Management Systems—Part 1

Hotel revenue management (or yield management) is the lifeblood of every hotel, small independent to international chain. It’s also an eternal source of stress for hotel managers, even those who are good at it.

These days, though, you don’t have to spend hours poring over spreadsheets, punching a calculator, or consulting a crystal ball. Modern hotel revenue management software systems have taken out much of the guesswork while retaining the ability to customize for your unique facility.

Here are a few hotel revenue management systems creating a buzz right now:

Frontdesk Anywhere

These days, it’s all about the cloud, and hotel revenue management software developers are aiming for “cloud nine” when it comes to making your job easier and more mobile.

One of Frontdesk Anywhere’s strongest features is its ability to integrate hotel revenue management and hotel global distribution channel management into one seamless application. The software keeps an eye on room availability, and analyzes all available data to assign the up-to-the-minute optimum room rate in a snap. It also covers all the bases: if the room rate changes on one distribution channel, it automatically hits the web to make sure room rates are consistent on all channels.

There’s also a social media app that allows potential customers to find your hotel and book a room – right from Facebook. Desktop, laptop, tablet, or smart phone, Frontdesk Anywhere has it covered.

IDeaS Revenue Solutions

IDeaS seeks to help small chain or independent hotel managers to maximize revenue on each and every room night. No more giving in to the temptation to “say yes to the guest”—any guest—just to fill up your hotel. Tapping into the most up-to-date data available, plus razor-sharp data analysis and uncannily accurate forecasting, IDeaS helps you bring the right guests through the doors: guests who are prepared to pay the right price for the right room.

This hotel revenue management system offers the manager a choice of room rate solutions, letting the manager choose the best one based on an instinctive knowledge of the big picture, while leaving the hard-core number crunching to science-based algorithms.

While the software is easy to learn and use, IDeaS doesn’t just send you a package and leave you to plug and play. Real live consultants can come to your facility to help you customize the software to your needs.

Tune in next time for a look at two more hotel revenue management systems: i-Rates and Duetto!

Smart eHotels helps independent and small hotel chains maximize their GDS and sales; contact our experienced team of hotel marketers today!

Yield Management Strategies: The Right Hotel Room Pricing – Part 5

In Part 1 of this series, we took an overall look at yield management strategies for setting the right room rate for your small or independent hotel and talked about the first segment of the four basic parts of the yield management cycle: forecasting demand.

In Parts 2 and 3, we broke down the second segment of the cycle: optimizing demand, and Part 4 covered the third segment: control demand.

Now we’re in the home stretch! Let’s take a look at the fourth and spoke of the yield management cycle: monitor demand.

An Ongoing Process

There’s a reason it’s called a “cycle;” yield management is an ongoing activity, not something you do once and relegate to a forgotten file folder in your memory bank. And like a bicycle, you need to keep “pedaling” to get anywhere with it!

Think of monitoring the current or just-ended cycle as part of forecasting for the next one.

No matter the chosen length of your cycle, sit down at the end of it for a review session. Where were you at the beginning of the cycle? What was the goal? Are the results anywhere near what you expected? Were the results better, on target, or nowhere near what you’d hoped?

Let’s say your goal was to sell those pesky last four of the ten available rooms that typically sit empty on lower-demand, mid-week nights. After putting out the word via your marketing channels and setting the controls in your chosen automated reservation system, you booked an average of two additional rooms on those nights.

Congratulations! You’re definitely doing something right if you reached 50% of your goal. Now is the time to take a closer look to see exactly where your efforts succeeded and where they fell short. There is always room for improvement in your tactics, but don’t let it get to you if your forecasting is never 100% accurate.

Accuracy Can Be Overrated – Sometimes

Let’s face it—it’s easy to predict when your small or independent hotel is going to be full; it’s much tougher to come up with ways to attract additional customers on low-demand nights (and to figure out why it works some times and not others). Improvement should always be your goal; shooting for 100% accuracy 100% of the time is a recipe for frustration.

You get as much out of the yield management cycle as you put into it, but there is a point where the law of diminishing returns kicks in. It’s possible to spend too much of your valuable time on tweaking room prices for the sake of that last little “nth” of a percentage point of improvement, when your time might be better spent on those intangibles that make your small or independent hotel the unique treasure it already is.

  • Customers appreciate customer service.
    You can drop the rate on those last two empty rooms by $5, but if you’re paying too much attention to numbers and not enough to customer service, a significant number of customers will pay the extra few dollars for better service at a competitor’s hotel down the road.
  • Customers appreciate pricing consistency.
    Customers, especially repeat customers, don’t like to see room prices going up and down like a yo-yo; they’ll constantly wonder if they’re actually getting a deal. Find a price point that gets the customer you’re looking for through the doors as consistently as is realistic. Then work on the things that keep them coming back – customer service and amenities.

Contact us today to find out how we can help you apply yield management strategies to your small or independent hotel!

Yield Management Strategies: The Right Hotel Room Pricing, Part 4

Now that we’ve discussed how to forecast demand and how to optimize demand, we’ll talk about how to control demand.

“Control demand?” you may ask. “My small or independent hotel is full almost every night. What’s there to control?”

Plenty, if you’ve been doing your due diligence and keeping track of your historical data.

Even if you’re selling every room, every night, there are always yield management strategies you can use to make sure you’re maximizing EMR (expected marginal revenue, discussed here) on each and every room.

Transient Reservations

Bookings from transient customers – that is, customers who are not part of a group or corporate contract – can be controlled in a couple different ways into order to maximize EMR.

  • Strategic
    Types of strategic controls used to target a special rate to a specific type of customer include:

    • Reservation must include a Saturday
    • Rate only applies if two guests are in the room
    • Advance reservation required (typically 14 or 21 days)
    • Requiring nonrefundable payment in advance

These strategic controls can be implemented manually at the front desk or within your chosen automated central reservation system (CSR). Certain types of strategies may “fence out” certain types of customers from making a reservation; for example, a customer that wishes to book only one night of a high-demand weekend. On the other hand, a business traveler who might have been willing to pay more could be fenced out, as well. However, the long-term trade-off could be worth it if your temporary special rate attracts a customer who might not have otherwise booked with you.

  • Tactical
    This type of control is applied to a special discounted rate that is tied to a specific date of arrival. For example:

    • Customer must arrive on a specific date
    • Customer must book a minimum number of nights
    • Customer is limited to a maximum number of nights
    • Customer must stay through a typically less-popular shoulder night

A tactical control can be used independent of, or in addition to, a strategic type of control. Which types of tactical controls you can use in a CSR depends upon which system you’ve chosen to use. Just be wary of a few common mistakes:

  • Be aware of your facility’s typical booking cycle. If a significant percentage of your transient customers book 10 to 14 days in advance, setting a tactical control outside that window could miss your target audience.
  • You will also to be aware of how far in advance to set these controls in the CSR – it won’t do you much good to input control settings seven days in advance, when the automated CSR you’re using won’t be updated for another two weeks.
  • Be selective with the controls you choose. Employing too many restrictions at once could unintentionally block some customers from making a reservation that should have been accepted.
  • Don’t set it and forget it. Once you’ve implemented the controls, keep an eye on the system to make sure everything is working as you intended. You could have implemented a conflicting set of controls, or the administrators of the CSR could have made system upgrades that render your controls inoperable. The worst time to discover this is when it’s too late to fix it.

Special Circumstances

There may be times you want to offer special rates and/or employ strategic and tactical controls as far in advance as possible.

Let’s say that your small or independent hotel is located in a popular winter sports locale that has just been selected as a venue for the Olympics – four years from now. It’s not too early to plan your strategy for marketing, pricing, and the combination of controls to employ to maximize each room’s EMR.

As time passes and the event draws closer, keep an eye on the results of your yield management strategies, and be prepared to make adjustments based on the success of your strategy and what your competition is doing.

Next time, we’ll discuss the last spoke in the revenue management cycle: monitor demand.

Yield Management Strategies: The Right Hotel Room Pricing, Part 3

In Part 1 of this series, we took an overall look at yield management strategies as they apply to setting the right room rate for your small or independent hotel, and talked about the first segment of the four basic segments of the yield management cycle: forecast demand.

In Part 2, we began breaking down the second segment of the cycle: optimize demand.

This time, for Part 3, we’ll finish up with demand optimization. Next time, we’ll move on to the third segment of the yield management cycle: control demand.

Group Bookings

So far we’ve worked with scenarios that involve one customer booking one room for one or more nights. If only it was always that simple!

As word spreads that your small or independent hotel is the place to be, you are going to have customers who want to reserve a block of rooms for a family event, group vacation tour, or maybe a business conference. Most, if not all, event organizers expect a special discounted rate for booking multiple rooms for multiple nights.

Let’s go back to our example of a ten-room, $100-per-night model hotel. You’ve received a request to reserve a block of five of your ten rooms for a weekend writers’ retreat, two nights over a Friday and Saturday. What price do you set for those rooms?

From our previous examples, we already know that you won’t accept anything less than $70 per night for your rooms. Let’s pretend it’s your high season and the hotel is routinely full of customers willing to pay full price. So, as you can see, you don’t have much incentive to accept the group booking unless the group is A) willing to pay full price for the rooms, and B) guarantee that all those reserved rooms will be filled with paying customers.

If it’s your low season, however, a request to reserve five rooms in advance is definitely more interesting. What kind of discounted rate can you offer the retreat organizer?

Let’s assume that from past history, you know that five customers will book a full-price stay over that weekend, filling half your rooms. Your expected revenue is:

($100 per night X 2 nights) X 5 expected bookings = $1000

Now take that expected revenue and divide it by the number of rooms requested for the retreat:

$1000/5 = $200

Take that $200 and divide it by the number of retreat rooms (5) times the length of stay (2) :

$200 ÷ (5 X 2) = $20

Twenty dollars off the full room rate of $100 per night is $80. But hold on – your rate floor is $70. You can offer an additional $10 discount without hurting your bottom line. You can, of course, negotiate for a higher rate, but you know what your minimum is, below which you will reject the booking.

Again, this is a greatly simplified scenario designed to show you, in a nutshell, how group bookings work. You may run into a situation where two groups want your facility over the same nights. You can’t accommodate them both, so you will need to calculate which booking to accept, and which one to reject. And how many rooms will you be willing to block at any given time, possibly at the expense of sure-thing bookings?

Unless you’re a whiz at math and can whip up calculations like these at the ding of a desk bell, an automated application will be a big help in implementing yield management strategies.

Additional Considerations

Just what you wanted to hear, right? More to think about! Let’s say your hotel has additional, revenue-producing features, like a restaurant or gift shop. Different classes of customers are more or less likely to use these facilities.

Business conference attendees will probably enjoy having an on-site restaurant and bar to retire to after a long day in seminars. Vacationers are more likely to grab a souvenir at the shop, but may go elsewhere for meals. Therefore you may market your facility more aggressively toward business customers, and concentrate less on the leisure travel crowd.

Then there are other expenses that apply to some customers, but not all:

  • Credit card fees
  • Travel agent commissions
  • Reservation channel (CRS) fees
  • Maintenance and cleaning expenses, which will vary by type of room (e.g. basic double to multi-room suite)
  • Frequent customer points/discounts

Optimizing demand for your small or independent hotel comes down to knowing your target customer base, what they will pay, and what expenses different sub-categories of your target customer tend to rack up. Once you know what variables go into your sales model, you (or your automated application) will know exactly what room rate to charge.

Next time, we’ll move on to the third segment of the yield management cycle, control demand.