HOW TO IMPLEMENT A BASIC YIELD MANAGEMENT STRATEGY

Effective Yield Management requires a combination of three simultaneous activities.
1. Research
2. Pricing
3. Stay Controls

 

Basic Yield Management Planning Checklist

 

1. Define Competitive Set (usually 6 to 10

     hotels)
2. Subscribe to...

Increase your RevPAR by using the LXR Competitive-Set Pricing Strategy.

 

The LuxuryRes Pricing Strategy is designed to increase your room revenue. The LuxuryRes Competitive-Set Pricing Strategy (CsPs) is based on both broad market studies and proprietary LXR pricing information. In summary, our data indicates that hotels that maintain LXR’s specified pricing differential relative to their Competitive-Set have an annualized RevPAR that is 3% to 9% higher than their Competitive-Set. When you consider the fact that a 1% increase in a hotel’s RevPAR can translate into a 10% increase in profit, these numbers only increase in significance.

 

Detailed documents supporting the basis for the LXR CsPs and instructions for implementing a basic Yielding Strategy at your hotel are available on request.

Maximize Your RevPAR

This Yield Management Strategy is designed to maximize a property’s RevPAR before, during and after a high-occupancy Event such as a major Convention or Holiday. This basic strategy can be adjusted to suit any market.

 

Strategy Premise

• The Event will produce very high demand

   for 2-3 days
• Days preceding the Event may be soft
• Demand displaced by the Event may shift

   Tuesday (following Event)

 

Strategy Goals

• Yield Maximum RevPAR
• Maximize ADR
• Maximize the Length of Stay
• Optimize Yield without decreasing

   revenue on potentially soft days

   preceding and  following the event
• Set-up Yielding for Displaced Demand

   that sometimes reschedules

   immediately following Events...

"A high occupancy Tuesday is no different

than a holiday weekend."

 

The following is an example of a very simple, yet effective, yielding strategy. We have chosen to highlight a Tuesday because Tuesdays have historically been the "peak" business travel day in most urban markets.

 

However, this strategy can be applied to any day of the week with high demand in any market. The underlying assumptions and actions will remain the same.

 

Step 1 / Research
Assumption

Based on the historical data in your PMS it is determined that business travel demand peaks on Tuesdays during the fall time period producing...