Question

Yield Management has been used in many industries including hospitality industry. How much do you understand about its nature and characteristics? Advantage and Disadvantage should also be discussed?

Answer 1

Yield Management is the strategy by which consumer behavior is used to maximize returns from a resource limited by time. For example in a hotel if a person is residing for 2 days he will be paying the rent for those two days but yield management will ensure that during this stay the hotel management earns the maximum possible revenue by selling the right product at the right price and at the right time to the individual and based on this the revenue earned from the individual is maximized in that limited period of two days.

Advantages:

1. Generating more revenue by organizations in that particular limited period of time

2. The brand loyalty may increase because if the right products are sold at a right price then that will help the organization's brand value to go up.

3. Proper and appropriate resources are being used in the process.