Hoteliers sell a good that perish every day, this is the basics for hotel business, a room you dont sell one day is some stock you will never sell. Roomnights perish every evening and that is a fact that the hotel business has to face since its beginnings.
An empty room is less productie than a free room if the potential guest is going to hae dinner at the hotel, or gamble at the hotel casino.
Yield management is all about occupancy and rev-par. Rev-par is the revenue a hotelier gets per each available room. Meaning that if you have 100 rooms, then you have 365x100= 36,500 room-nights, and if you get 2 million revenue that year then you have 54,8 euros or dollars per available room.
The revenue does not only come from the cost of the room, lodging is just a part of the business.
The art of revenue management is to increase the rev-par more than any other business figure. Once you hae hotel up and running the fix costs are usually the big part of the expenses, and I am including in this costs the maintanance, the salaries and wages, the supplies, the amortizations of the fix assets.
The marginal costs in a hotel are usually low, a room waitress will be paid the same if she cleans 2 or 12 rooms, and the food costs, etc. are not relevant as compared to the income a new guest brings to the business.
Still the question remains there: ¿What is the perfect room rate that will enable my hotel to maximize the rev-par? The answer to this is: It depends.
Sometimes the forecasts based on same period previous year works and still we must consider other factors as what happened last year that will not happen this, or viceersa, are there new hotels near that can impact our business, what is the economical sitution as compared to last year, and so on.
But to readjust your rates based on a number of factors and some commercial deals signed with corporates are simply not enough. A hotelier must make his hotel present and available everywhere to benefit from opportunities he is not even awared of.
You must be present in all channels and make them work for you from your office. You need to adapt your PMS or get a new one that can be XML integrated with all sorts of distribution platforms at the variable cost you choose.
That is where channel manager tools fit in the rev-par equation. Try to google for these and get references from me if you need them:
Dingus
Once you master the art of getting ur hotel presence upgraded to universal aailability you will find that yield management can be not just profitable but also FUN
