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How does Yield Management work ?

What is Yield management?


Yield management is a variable pricing strategy, based on understanding, anticipating and influencing consumer behavior in order to maximize revenue or profits from a fixed, time-limited resource (such as airline seats or hotel room reservations or advertising inventory).

As a specific, inventory-focused branch of revenue management, yield management involves strategic control of inventory to sell it to the right customer at the right time for the right price. 

This process can result in price discrimination, in which customers consuming identical goods or services are charged different prices.

In eZee Frontdesk Configuration, we do have the feature of Yield Management where by you can manage Yield by Creating Slabs & Rules.

Important Understanding:

Yield Management rates will be automatically created once you create Slabs and Occupancy Rules. 

So Before configuring Yield Management(Slabs and Rules), First rates must be added into eZee Frontdesk Configuration >> Property Setup >> Tariff Operations >> Define Tariff >> Select the Room Type & Rate Type and add Tariff >> Save.

Example & Logic of Calculation Factor.

Let’s say you have added 1000 as the tariff in Define Tariff for the Delux Room Type & American Plan Rate Type.

So when you create Yield slabs it will automatically create rates according to calculation factor(+/-)  you have selected for occupancy as shown in below screenshot 

Steps to Configure Yield Management.


1) Goto eZee Frontdesk Configuration >> Property Setup >> Tarrif Operation >> Define Tarrif >> Add Tarrif for the Room Type & Rate Type.

2) Activate Yield Management.

Open eZee Frontdesk Configuration >> Advance Settings >> Rental >> Check Mark “Yield Management” >> Save 

Refer below screenshot.

3) Once Yield Management will be activated below screenshot option will be enabled where by you are going to Create Slabs and Rules.

4) How to Create Slabs and Define Calculation Factor

 

5) Now when you check Yields Rates from eZee Frontdesk Configuation >> Property Setup >> Yield management >> Rates 

Refer below screenshot where the rates are created automatically based on +/- calculation Factors on Slabs.

6) Now, How to test Yield Management is working or not?

– Go to Inventory View >> Take Specific Date and check what is the occupancy showing on that date as shown in below screenshot

      Scenario 1)  Walk-In

–  Now try to take Booking/Reservation/ Check-In and see whats rates is coming.  –  If you can see in last screenshot Occupancy is showing 0% so Slab 1 will apply 0-10% = (-25)
                                      

                                           Means 1000-25%=750.
                             

                                – Upon Check in it will showing as below screenshot

       Scenario 2) Booking


                                           Now, We have occupancy is 13.33% as shown in the screenshot below.

So according to 11% to 25% Occupancy, it’s gonna take the rate- 800.


                                           Meaning 1000-(20%)=800-Upon Booking it will be showing as below screenshot