Yield Management
Yield Management is an exciting and powerful feature of roomMaster. This feature will allow you to manage your rates more efficiently to maximize your revenue opportunities. Rates can be configured to change based on occupancy levels, and discounts can be converted to maximize room rates when the hotel reaches certain occupancy levels.
If the hotel makes an additional $100 per day using the Yield Management features, that it an additional $36,500 profit in a year! Of course, this is a very conservative estimate, but it shows how easily the functionality pay for itself within a short period of time.
About Yield Management
Yield Management ("YM") is a function that changes rates based upon occupancies and other related circumstances. YM's ramifications can be positive and can dramatically increase your revenues and profits. However, when configured/used incorrectly, YM can produce incorrect results and possibly decrease revenue. IN NO EVENT shall InnQuest Software, its resellers, or its agents be responsible or liable for any loss of revenue or profits or any other damage/loss in a result of the use of the YM feature, or any other roomMaster software feature. It is highly recommended that any user/staff who uses or sets up Yielding be trained. InnQuest Software offers Executive Consulting Services, On-Site Training as well as training videos, all of which fully explain how to successfully and profitably use YM. SUPPORT CALLS related to YM in terms of advice or usage will be forwarded to a sales manager to discuss training and consulting opportunities to your benefit.
To setup Yield Management, select Setup > Configuration > Reservations > Rate Information > Yield Management tab or the short-cut entry of Setup > Rate Management > Yield Management tab.
Yield Management Settings
Yield Type Select how Occupancy is calculated when applying Yield Management.
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Base Yield on Hotel Occupancy - The current entire hotel occupancy (excluding Meeting Rooms) will be used when yielding rates.
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Base Yield on Room Group Occupancy - The current occupancy of all room types within the same room group will be used when yielding rates. For example: If you had a room group of "KINGS" which encompassed both KING SMOKING rooms and KING NON-SMOKING rooms, the yielding occupancy would be the same for both room types. This is usually the most popular and most effective way to yield rates.
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Base Yield on Room Type Occupancy - The current occupancy of just the room type being used in the reservation would be used when yielding rates. For example, if 90% of the KING bedded rooms were sold and 0% of the SUITE rooms were sold, and a guest were booking a KING bed room, the occupancy would be based on 90% even though the entire hotel occupancy may be currently at 50% when taking into consideration all room types.
Ignore Yield Rate Modifications for Groups - When checked, if the reservations were attached to a group, but not an allotment group, yielding adjustments would be ignored and the base rate for the group would be used.
Ignore Yield Rate Modifications for Allotments - When checked, if the reservations were attached to a group which was also defined as an allotment, yielding adjustments would be ignored and the base rate would be used.
Do not apply Yield Modifications for Current Day's Rate - When a reservation is being made for the current day (audit date), the current day's rate would always be based on the base rate, regardless of Yielding adjustments that are in effect. For multiple night stays, Yielding adjustments would be applied to the all nights after the first night. Use this option to avoid when quoting many rates for the current day to a guest over the phone, and when they arrive (without a reservation) that the rate did not fluctuate depending on the current occupancy. Previous reservations which were made on previous days would still keep their yielding adjustments in effect.
Sites who do a lot of WalkIn business should check this box. This will prevent two different rates being quoted to two different guests checking in at the exact same time.
Apply Yield Increase/Decrease to closed discounted rates - When a reservation is using a discounted rate (a Rate Code marked as a Discounted Rate), and the discounted rate is closed, this checkbox determines if the rate being used is the Rack Rate or Rack Rate + Yielding. For more information, see Closed Discounted Rates.
Apply Yielding before Applying Derived Rate Adjustment - When checked, any yielding adjustment to a rate will be applied before the derived rate adjustment. Rates would be calculated using the following logic:
** ((Base Rate +/- Base Rate Exceptions +/- Yielding Adjustment) +/- Derived Rate Adjustment) + Extra Adults + Extra Child +/- Discount % or $ **
In this manner, the rate calculated is truly derived from the rate that would be available for a specific day.
Example: A property using Yield Management derives their Expedia rate as 30% less than RACK. For a specific date, the RACK rate for a room is $100, there is an exception configured for an increase of $20 and the occupancy for the date has generated a Yield Adjustment increase of $40. The rate calculation is:
| Base Rate | Base Rate Exception | Yield Adjustment | Derived Rate Adjustment | Final Rate |
|---|---|---|---|---|
| $100 | + $20 | + $40 | x .70 (30% Discount) | = $112 |
The Expedia rate, $112, is 30% less than what the RACK rate would be for that day, $160. With the option unchecked, the rate for the same day would be $124 (($100 + $20) .70 +$40 =$124).
This is a global option and will apply to all rate codes. Different rate codes cannot be configured to calculate differently.
Unlock/Recalculate Rates when change in number of adults - When checked, if the number adults is changed on a reservation, the previous yielding rate is unlocked and the current yielding will be applied to the reservation. Only check this if your rates change depending on the number of adults or there is a charge for extra adults.
Unlock/Recalculate Rates when change in number of children - When checked, if the number children is changed on a reservation, the previous yielding rate is unlocked and the current yielding will be applied to the reservation. Only check this if your rates change depending on the number of adults or there is a charge for extra children.
Note : When the Unlock/Recalculate options are checked, once the rate for the checked option on a reservation has been unlocked, changing the number of adults and/or children on the reservation will change the rate on the reservation. For example, if the Unlock option for adults has been checked, and the number of adults is changed, any change to the number of children at this point would also change the rate.
Only lock Rate Codes included in Yield Management - When checked, rates will not be locked on reservation and folio records which have a rate code that is not included in Yield Management. Checking this option will cause the rate to be unlocked on existing records with a rate code that is not included in Yield Management.
Include Meeting Rooms in Yield Rate Modifications - When checked, you can apply rate yielding profiles to room types that are marked as Meeting Rooms. Meeting Rooms are still not included in the Yielding Occupancy percentage when calculating the occupancy for Rate Modifications. This option only allows a profile to be assigned to a meeting room, however, remember that the occupancy for when to modify the price will not include meeting room types to determine the current occupancy.
Changes are Logged to Event Log
Whenever changes are made to the Yield Management settings, it is documented in the roomMaster Event Log to identify exactly when any changes were made and by which user.
Additional help for Yielding
See the next section, Yield Management Rate Modifications, for information on setting up the specific yielding adjustments and the yielding calendar.
The Pace Booking Analysis Report gives information to help determine when to create Rate Increases and Decreases based on past performance and bookings.
The Manager's Daily Report and Manager's Yearly Report will show the Yielding Variances which have been applied to room postings. There are also two SQL Queries that can be found in the SQL Queries folder that can help you bring up reservations which have been yielded, and can be used in the Interactive and Embedded SQL.