Why Yield Management Is Important To Hotels Essay

Why Yield Management Is Important To Hotels - Essay Example The paper focuses on the potential value of ‘revenue management, also known as yield management’ to hotels. In the context of the hotel industry, yield management is a term used for describing a high range of techniques through which occupancy is appropriately managed so that the profits of a hotel are increased. Therefore, yield management is quite important to hotels. However, in practice it has been revealed that yield management can also have a series of implications for the organization, its employees, and customers; this issue is discussed below using literature published in this field. Yield management in the hotel industry has a series of advantages. Baker, Huyton & Bradley note that yield management if it is used in the particular industry, it can lead to ‘the increase of a room’s revenue and of its space’. It is explained though that yield management can play the above role only if a staff is appropriately trained for offering customer servi ce of high quality. In other words, low employee efficiency can eliminate the value of yield management, either in the short or the long term. In any case, the value of yield management, as a key concept in the hotel industry, cannot be doubted. Indeed, yield management can highly benefit the hotel industry. The potential for accurate forecasting is considered as one of the most important advantages of yield management systems. However, the above benefit can be available only in hotels that use advanced IT systems that can monitor every organizational activity and provide accurate information in regard to the organization’s strengths and weaknesses.   Yield management can also help hotel managers to make effective plans in regard to the potential expansion of the organization. For example, in order for a hotel to enter a foreign market, it would be necessary for the hotel’s managers to have an accurate view of the hotel’s profitability so that they are able to check whether the risk of potential losses could be undertaken or not.