Front Office

6th Sem Notes

HOURS ALLOTED: 30 MAXIMUM MARKS: 100 S.No.

Topic
Hours
Weight
age
01
YIELD MANAGEMENT
A. Concept and importance
B. Applicability to rooms division
Capacity management
Discount allocation
Duration control
C. Measurement yield
D. Potential high and low demand tactics
E. Yield management software
F. Yield management team
14
50%
02
TIMESHARE & VACATION OWNERSHIP
Definition and types of timeshare options
Difficulties faced in marketing timeshare business
Advantages & disadvantages of timeshare business
Exchange companies -Resort Condominium International, Intervals International
How to improve the timeshare / referral/condominium concept in India- Government’s role/industry
role
10
40%
03
FRENCH
Conversation with guests
Providing information to guest about the hotel, city, sight seeing, car rentals, historical places, banks,
airlines, travel agents, shopping centres and worship places etc.
Departure (Cashier, Bills Section and Bell Desk)
06
10%
TOTAL
30
100%
 Unit – 1 Yield management

Concept & Importance

Definition
Yield management is the practice of maximizing profits from the sale of perishable assets, such as
hotel rooms/airline seats, meals & beverages, by controlling price and inventory and differentiating
product and service. Yield management is based on:
 The differentiation of tariffs/rates/margin
 Segmentation of consumers, understanding of consumer lifetime value and understanding
specific consumer needs
 Differentiation of products and services
 Statistical modelling and forecasting demand

By seizing control of the sold volume at each price level, Yield Management permits a significant
augmentation of revenue. Yield Management (Revenue Management) presents a more basic
measure of performance because it combines Occupancy Percentage with Average Daily Rate
(ADR) into a Single Statistic called the Yield Statistic. Thus, yield management is an evaluative
tool that allows the front office manager to use potential revenue as the standard against which
actual revenue can be compared. A successful yield management requires analysis, evaluation and
strategy.

Origin
Yield management first appeared in the aviation industry, when in the 1970s the deregulated
industry began to maximize efficiency, ensuring all seats were occupied before take-off, and
offering varied price structures to the consumer. For the first time, it was acknowledged that having
passengers paying at least something towards operating costs was better than flying with empty
seats. The element that links aviation to the hospitality industry is that both inventories are
“perishable” – once the plane takes off, there is nothing you can do about trying to sell any of the
seats on the plane. Similarly, when a room is empty on any overnight, the opportunity for revenue
of that night is lost forever. A room has a 24 hour “shelf life”. In the manufacturing and other retail
industries, there may be capacity to keep the stock and put it on the shelf if not sold, but that luxury
is not available to the hospitality industry.

Concept
 Time Focus
 Customer Focus

Importance of yield management

It is easier to define the objectives of yield management rather than explain what it actually is – the
outcomes are easier to understand than the process. Few major objectives of yield management are
given below:
 To Increase Room Sales
 To Maximize The Revenue
 Control Over Daily Rates
 To Determine MLS
 To Set Target for Marketing
 To Synchronize Objectives
 Maximize ROI
 To Give Holistic View
 Maintains Sales Mix Ratio
 Simplify Channel Management
 Supports Customer Relation

Applicability to room division

Capacity Management
 It is also called as “Inventory Management or Selective Booking”. The major aim of capacity
management is to fill up the hotel rooms as much as possible. Sometime properties also take
the overbooking for the hotel rooms because properties want to offset the potential impact of
early check-outs, cancellations, and no-shows.
 With the help of historical data or experience, hotels can also project the walk- ins and on-
day pick up figures which produce good revenue to the hotel. In case of capacity
management, hotels also need to control and limit the space to prevent the walking out guests
because it can create a negative impression in the mind of the guest for the hotel which may
also affect future business.

Discount Allocation
 The theory is that the sale of a perishable item (guestroom) at a reduced rate is often better
than no sale at all. The discount is usually allowed to the group travellers, long staying guest,
guest with confirmed booking or during off – season when demand is low for the hotel
rooms.
 So, with the help of discount policy hotel can cover at least their operational costs, like –
room maintenance cost and staff salary. Price elasticity (it means price should be dynamic in
nature, it may be according to the season, according to the guest like individual guest, group
travellers, walk – ins, reservation guest). Room rates are usually high for the walk –ins guest,
individual guest and low for the group travellers, reservation guest.

Duration Control
 It means, place time constraints on accepting reservations in order to protect sufficient space
for multi-day requests. It is preferable that a reservation for one night stay may be rejected,
 even though space is available for that night, if there is any request for more days by some
other guest because it gives more profit to the hotel.
 Properties have to adopt the strategy of minimum length of guest stay. Sometime properties
should also adopt the combined strategies like – duration and discount, in order to fill up the
hotel rooms or to generate the good revenue.

Elements of Yield Management

Group room sales

 Group booking usually received three months to two years in advance. Some international
commercial hotels and popular resorts commonly book groups more than two years in
advance.
 Group booking should accept & confirmed after considering its potential impact on overall
room revenue of the hotel because group sales are usually done at discounted price. This
discount may vary with groups due to various factors which impacts hotel’s overall revenue
like size of groups, requirement of additional services and facilities.
 The group related information which impacts revenue include – group booking data, group
booking pace, anticipated group business, group booking lead time and displacement of
transient business.

Group Booking Data

 Determines whether the Group blocks already recorded in the Reservation File should
be modified or not and adjusts expectations by reviewing the Group’s Booking History

Group Booking Pace

 Watches out for the Rate at which Group Business is being booked (Consider historical
Trends)

Anticipated Group Business

 Watches out for repetitive Group Patterns and act accordingly in order to forecast the
pressure on the Market, and hence adjust Selling Strategies

Group Booking Lead-Time

 Measures how far in advance of a stay Bookings are made. This is very important in
determining whether to accept an Additional Group and at what Room Rate to book
the New Group
Transient (FITs) room sales
 It is concerned with non-group business or individual sales. Generally, majority of group
business received three to six months before actual arrival whereas transient booking
received usually one to three weeks before arrival.
 Due to very short lead time, often rack rate or a very little discount is given to transient
guests. Therefore, it is more profitable than group business as well as it also reduce the
revenue loss that may occur due to room cancellation.
 Generally, the level of discount in room rates varies with types of transient booking like
airline crew members, corporate clientele and incentive guests gets more discount than walk-
in guests.
 This discount policy varies due to various reasons like corporate clientele and airlines have
mutual/legal agreement to pay even during no-shows which is not possible with walk-in
guests.

Food & beverage sales

 As hotel rooms are primary product to generate revenue; food and beverage may consider as
a secondary product of revenue generation. It creates a lot impact on total revenue generated
by the hotel.
 Many times hotel differentiate (like transient vs. group booking request) and then accepts its
booking on the basis of revenue generated by supporting services in which food & beverage
is the primary consideration.
 At the time of having more than one group booking request, hotel needs to consider
supporting/ancillary revenue generation by each group, thereafter accept booking. This
process of group study then selecting one (or rejecting one) is known as displacement.

Local and area wide activities

 It refers to those activities which create profound guest-flow in your locality like during large
conventions. If such circumstances, most of convention centres displaced to smaller groups
and transient guests.
 When this occurs, the front office manager should be aware of the convention and the
demand for guestrooms it has created. If the demand is substantial, transient and group rates
 may need to be adjusted. In order to plan a perfect adjustment strategy, a front manager
should refer past few years’ history.
 If past few years history indicate either group or transient room sales is significantly altered,
the front office manager should immediately investigate.
 An increase in demand indicates that a convention in the area or a large booking at another
property whereas a decrease in demand indicates to a major group cancellation at a
competing property, which may now reduce its room price in order to fill its rooms.

Special events
 At here special events refer to concerts, festivals and sporting events which may take place in
the locality or nearby your hotel.
 During such kind of events, hotels have a great chance to maximize its total revenue due to
such demand-enhancing activities by restricting room rate discounts or requiring a minimum
length of stay restriction.

Fair market share forecasting

 Along with above mentioned elements, fair market share forecasting is also a one more
crucial element of yield management.
 This element s concerned with understanding that how well the hotel is doing in relation to
the competitors.

Measuring Yield

Measuring yield means to judge the outcomes of the planned strategies which were designed to
maximize the hotel’s revenue and also consider as one of the principal computations involved in
revenue management i.e. the hotel’s yield statistic. The yield statistic is the ratio of the actual
revenue (total revenue generated by the number of rooms sold at different room rates) to potential
revenue (the amount of money that would be received from the sales of rooms at a rack rate). The
following equations are required to handle to measure the hotel’s yield -

Formula 1: Potential Average Single Rate

Formula 2: Potential Average Double Rate
Formula 3: Multiple Occupancy Percentage*
Formula 4: Rate Spread
Formula 5: Potential Average Rate
 Formula 6: Room Rate Achievement Factor
Formula 7: Yield Statistic
Formula 8: Identical Yields Occupancy
Formula 9: Equivalent Occupancy (Situation A)
Formula 10: Discount (Situation B)

Note. * Multiple occupancy percentage differs from double occupancy percentage. Double
occupancy percentage is calculated by total number of guest (house count) less total number of
occupied room (multiple by 100) and divided by total number of occupied room.

Practical Problem

Suppose, hotel XYZ has total 250 rooms and currently it is operating at a 60 percent average occupancy. The
collected actual average room rate is around 3000 per room with 105 rooms are occupied by more than one guests.
The hotel also forecast that in near future, the actual average rate may raise to 3, 500. This increment of Rs. 500 will
also produce an additional marginal cost of Rs. 150 per room. On the other hand, if occupancy percentage goes
below to forecasted figure then hotel may offer discount of 10 % of average room rate. Now, let’s handle the
equations -

Room Type Number of Room rate (based on) Total revenue of

rooms sold
Single Occupancy Double Occupancy 01 bed 02 beds
room room
- 01 bed room 100 100 rooms @ 2, 500 100 rooms @ 4, 000 2, 50, 000 4, 00, 000
- 02 beds room 150 150 rooms @ 3, 500 150 rooms @ 4, 500 5, 25, 000 6, 75, 000

Total 250 rooms sold 7, 75, 000 10, 75, 000

Formula 1: Potential Average Single Rate = Single Room Revenues at Rack Rate
Number of Single Rooms Sold
= 7, 75, 000 = 3100 is potential average single rate.
250 rooms (sold)

Formula 2: Potential Average Double Rate = Double Room Revenue at Rack Rate
Number of Double Rooms Sold
= 10, 75, 000 = 4300 is potential average double rate.
250 rooms (sold)

Formula 3: Multiple Occupancy Percentage*= Number of Rooms Occupied by more than 1 Person
Total Number of Rooms Sold
= 105 rooms x 100 = 42 % is multiple occupancy %
250 rooms

Formula 4: Rate Spread = Potential Average Double Rate – Potential Average Single Rate
= 4300 – 3100 = 1200 is rate spread.

Formula 5: Potential Average Rate = (Multiple Occupancy Percentage x Rate Spread) + (Potential
Average Single Rate)
 = (0.42 x 1200) + 3100 = 3604 is potential average rate.

Formula 6: Room Rate Achievement Factor = Actual Average Rate

Or Rate Potential Percentage Potential Average Rate
= 3000 = 0.83 or 83% is rate achievement factor
3604

Formula 7: Yield Statistic:

Yield Statistic = Actual Rooms Revenue Or Rooms Nights Sold x Actual Average Room Rate
Potential Rooms Revenue Rooms Nights Available Potential Average Rate

Or

Yield Statistic = Occupancy Percentage x Achievement Factor

= 0.6 x 0.83 = 0.498 or 49.8% is current yield

Formula 8: Identical Yield Occupancy = Current Occupancy Percentage x Current Average Rate
Proposed Average Rate

= 60 % x 3, 000 = 0.51 or 51% is identical yield occupancy

3, 500

Formula 9: Equivalent Occupancy:

Situation A When hotel consider that the future average room rate will be raised up to 3, 500 (3, 000 + 500). The
premium of Rs. 500 is expected raised figure.

Equivalent Occupancy = (Current Occupancy Percentage) x ((Rack Rate – Marginal Cost) / (Rack
Rate x ((1 – Discount Percentage)) – Marginal Cost)

Equivalent Occupancy = Current Occupancy Percentage x Contribution Margin

New Contribution Margin

= 60 % x 3, 000 – 150 = 0.51 or 51.04%

3, 500 – 150

Situation B When hotel consider 10% discount on average room rate (3, 000). Now the actual average room rate
will be 2,700 (3, 000 – 300). The Rs. 300 is discount.

= 60% x 3, 000 – 150 = 0.67 or 67.06%

2, 700 – 150

Potential high & low demand techniques

High Demand Tactics

As we all know that during the peak season almost every hotel earn good revenue by selling maximum number of
rooms per night. But this revenue can also maximize beyond the thinking with the same number of available room
inventory. The tactics which used to generate highest possible room revenue during the peak season is called as high
demand tactics. Some important tactics for high demand periods are mentioned below -

Close or Restrict Discounts

 Discount means giving the hotel room/rooms at lower than rack rate. It usually given to group travellers,
crew members, travel agent, tour operators and so on, but avoid giving to walk-in guest. Front office
requires restricting this discount policy for a limited period of time (it should usually offer in off season) or
for a limited target market and applies discount only when necessary because it affects the total revenue
generation or hotel’s profitability.
 For example – suppose a hotel sells a room @ of Rs.10, 000 per night then it can earn Rs. 100, 000 by
selling 10 nos. rooms on a particular night. On the other side, if they apply discount policy (and assume hotel
offers 10% discount) then hotel will earn Rs. 90, 000 by selling the same nos. of rooms (i.e.10 rooms) on a
particular night.

Apply Minimum Length of Stay

 It means that hotel must consider establishing a minimum number of nights per stay because if they put this
kind of strategy they can earn more revenue than before. It gives more revenue because it reduces the chance
of vacant rooms for a particular night due to continuous guest occupancy.
 In order to make it success, majority of hotels apply discount policy or by selling free rooms or discount on
room on the first or last day of stay. This policy is more effective when any special event going to held in the
city.

Reduce Group Room Allocations

 It means to reduce the blocking of rooms or not selling of rooms for a group when they not give guaranteed
booking because in case of no-show of entire group or few members of the group, it may cause heavy loss of
revenue.
 Group bookings also give less room rate than individual guest or walk-in guest, so try to reduce group room
allocation during high demands. Therefore, almost every hotel has started the overbooking system where the
number of booking is more than number of available rooms.

Tighten Policy
 At here, policy is related with guarantee and cancellation policy. If you tighten the guarantee and
cancellation policy, you can reduce the number of no-shows which leads towards high room revenue. Hotel
requires intimating the guest regarding the cancellation time well in advance during the reservation
enquiry/first conversation.
 Hotel must provide full information regarding the cancellation or amendments procedure i.e. specific time,
percentage of deduction of money and so on.

Prevent Early Check Outs

 In order to prevent early check outs; most of the hotels apply deposits and guarantees to the last night of
stay. At here, gust requires to pay in advance at the time of arrival or when he/she reaches to the house limit.
It reduces the chance of hotel’s revenue loss because hotels have already taken the advance payment from
the guest.
 In some cases, hotel also return the money if guest want to early departure but it usually depends upon the
hotel’s individual policy. Hotels usually collects 75 %, 50 % or 25 % of the amount in advance and set a
 house limit of individual guest and when guest reaches to this pre-settled limit, a notification slip is issued to
guest for immediate payment in order to receive continuous hotel services & facilities.

Right Market Segment

 It means that front office manager should try to define the right mix of market segments in order to sell out
the highest possible room rates. For example – commercial hotel should target towards a business men
because they are often ready to pay higher rates whereas resort hotels mostly targeted towards the family
clientele.

Monitor Potential Market

 It means that hotel should focus to attract the potential market segment or new business bookings. Use these
changed conditions to reassign room inventory (as occupancy increases, consider closing out low room rates
and open them only when demand decreases). Hotel must target towards businessmen because they are
usually ready to offer published rates and in return they want excellent services & facilities.

Targeted to Higher Payee Group

 It means hotel’s sales & marketing department and reservation department must focus towards those groups
or guests who are ready to pay published room rate or higher room rates. For example – in case of
conference or convention, organizer usually ready to pay higher revenue to the hotel.
 Hotel should try to displace price-sensitive groups. Hotel can also try to sell rooms to these low payee
groups for the low demand days or for a peak season by offering a discount.

Low Demand Tactics

It is just opposite of high demand tactics. At here, hotel management must forecast then implement various
techniques in order to maximize the room revenue during the off season. Again, the available number of room
inventory is same but demand is on lower side, so what methods or tactics hotel used to sell these rooms in off
season will be collectively called as low demand tactics. Some important tactics for low demand periods are
mentioned below -

Offer Packages
 Generally, in off season hotels apply various strategies to enhance the room sales and offer a package is one
of the strategies among it. In it hotels includes tactics like – giving tickets for free movies, discounted
coupons & so on.
 In package system, there are multiple things which sell to guest at a particular price. For example – majority
of hotels, offer multiple nights and days stay with other recreational facilities like mountain climbing,
sightseeing & so on at single rate.

Keep Discount Categories Open

 As we already discussed earlier in minimum length of stay about it. Majority of hotels offer discounts for
staying longer. The rate or percentage of discount may be differing among different groups or individuals.
 For example – travel agent or tour operator gets more discount than any other person like incentive guests,
as group generate bulk business for the hotel.

Encourage Upgrades
 It means that if any guest ready to pay a certain amount for a particular room then receptionist or reservation
agent must has ability to encourage the guest for buying an upgraded room like suits room.
  Agent can encourage guest to go for upgraded room by showing that there is a very little difference between
the room rate of standard room and suite room and inform him about the additional/upgraded suits room’s
services & facilities. Better rooms will encourage to guest to return.

Remove Stay Restrictions

 In high demand tactics, it is good to put minimum length of stay but in low demand tactics it is just opposite.
Hotel’s requires removing any kind of such stay restrictions in off season because it will affect to those
clienteles who just want to stay for a day or for limited number of days. On the other side, if hotel rooms
goes vacant, a heavy loss of revenue occur, so it’s better to earn something rather than nothing.

Flexible Rating System

 It means you required to carefully design a flexible rating system that permits your sales agents to offer
lower rates under certain situations to different guests for the same kind of room, services & facilities.
 Hotel set some reason or logic behind it like - group room sales get lower room rate for each room than
walk-ins (as group provide bulk business), corporate guests, crew members & confirmed booking also get
rooms at low price (due to confirmed business), walk-in guests will get higher room rate (as it is uncertain
booking), family guests (or package plan rate) will get discounted room rates due to number of things are
sold at single rate or price, etc.

Open Discount Policy

 During the low occupancy period, hotel must open the various discount policies to attract the regular as well
as potential market. Hotel requires opening lower rate categories, soliciting with price sensitive groups,
promoting – corporate, government, and other special discounts policies and developing new rate packages

Block Few Room for Walk Ins

 Walk ins are also known as “Chance guests” because they give a great chance to earn a good profit by
selling a room on rack rate or published rate (especially during the off season). Therefore, it is important to
block few numbers of rooms for walk in clienteles.

Offer Hurdle Rates

 Hurdle rate is the lowest room rate for a given day/s (or period/season) below which it is impossible for
hotel to sell the rooms. It encourage to guest to stay at the property as long as possible, it also protect (or
give chance) hotel to cover at least cost of occupancy.

Yield management software

There are lot of software available for accommodation businesses that will produce yield results on a monthly basis
which can be used to allocate marketing resources by defining off-season promotions and the prices and advertising
dollars that can be applied. Yield management is not a new software program for the hospitality industry – it is a
system or method of analyzing a business, with many elements that may be applied differently in different
businesses. The yield management software analyze the collected raw data from in – house property management
system and identifies certain booking patterns then categories all the collected information and prepares forecasting
models in the form of straight forward reports. Quite simply a yield / revenue management system performs the
following tasks:

Managing Overbooking
 It means yield management software automatically manage the risk of overbooking. The yield management
system uses the expected demand (pre fed by the hotel) to calculate maximum revenues in an optimal
 configuration of different available rates. This is usually called as “Logical availability”; the availability of
different rates (combined with conditions) with an automatic overbooking level when necessary.
 It is different from the physical availability (i.e. the number of room you have available), since a room may
be counted for different rate and conditions. Obviously, as the hotel will get nearly full, the logical
availability approaches the physical availability (including overbooking percentage).

Determining Availability
 The yield management system is designed to provide hotels with the power to analyze and suggest the most
profitable room yields. The system analyzes the multilevel pricing structure and automatically proposes rates
based upon future occupancy trends.
 Extensive room forecasting (for individual, group as well as sales mix ratio) capabilities help you to project
the number of rooms that will be sold. Room rates can be changed based upon a specific date,
room/reservation type and current house count/occupancy level.

Reduce Data for Evaluation

 Yield management system taking away the manual labour to manage the different room rates along with
some related task; it updates rates and availability in the Property Management System (like Fidelio or
Opera), and in online portals. It can handle some portals directly (like booking.com and Expedia), or use an
online consolidator like Rate Trigger.
 It means that it can minimize the recording (especially manual recording) of data for the purpose of review
and evaluation because it automatically perform the entire task of recording, reviewing, evaluation and
finally produce desired result or reports.

Identify Low & High Season

 Yield management system maximizes (or at least significantly increases) revenue production for the same
number of room inventory, by automatically (or due to previous fed data) taking advantage of the forecast of
high demand/low demand periods.
 System can effectively shift the demand from high demand periods to low demand periods and also can
directly charge a premium for late bookings. While yield management systems tend to generate higher
revenues, the revenue streams tends to arrive later in the booking horizon as more capacity is held for late
sale at premium prices.

Highlight Abnormal Market

 The software automatically highlights the abnormal market behaviours. Yield management software allows
the hotel management to save the best rooms for important guests, thereby increasing the overall value to the
customer and improving satisfaction.
 Integrated guest profiles allow you to build a field of knowledge about the needs of loyal customers so you
can personalize their visit and make their experience better, as much as you can.

Create Reports
 Yield management systems create various required reports for hotel management, like – future arrivals status
report, weekly recapitulate report, room statistics tracking sheet and so on. On the basis of these reports,
yield management team can do better forecasting for room sales and revenue management.

Assists in Room Services

 Hotel’s yield management is more complex than that of the airline industry. In addition to setting guest room
and suite prices, the software also provides the ability to activate wake-up calls and to coordinate room
activities like housecleaning or in-room meals and other offered facilities like video checkout.
Multiple Interfaces
 A yield management (YM) system is one of the most recent examples of system development in the hotel
industry. Yield management systems interact with central reservation system, global distribution systems,
property management systems and front office systems. It has the ability to interface with other multiple
systems or software’s.

Yield management team

The good team is always behind the successful completion of any task. A team is driving force behind the
successful implementation of yield management. The team is usually consisting of the management level personnel
like – General Manager, Room division Manager, Reservation Manager and Sales Division Manager. The
coordination and cooperation among all the staff member is also a necessity of successful implementation of yield
management. The effective roles of above mentioned manager are given below:

General Manager
 He/she is the chief operating officer of a hotel or manager in a hotel organization. Principally he/she is
responsible for the successful operation of the hospitality establishment and for making long term planning
for hotel in terms of budgeting & forecasting, room rate determination, discount policy & so on.
 General Managers have all rights to change room rates as & when (required), so for the successful
implementation of yield management, it is very important to have a full support of general manager.

Room Division Manager

 Room division manager works under general manager, therefore, he reports to him. He is responsible for the
supervision of front office, reservations, housekeeping, concierge, guest services, security and
communications departments.
 He/she has an overall control of the department with targets for maximizing both occupancy & revenue. He
assists to general manager and reservation manager in developing strategies in relation to maximization of
revenue/yield (or makes plans that show how a room revenue/yield could be maximized).

Sales Division Manager

 The sales division manager assists the director of sales to increase corporate client base through consistent
solicitations while establishing trust and rapport with clients to generate and boost revenues for the
hotel. The sales manager’s services are to attract potential as well as existing guests to ensure repeat
business. This position requires excellent communication skills - both written and verbal.

Reservation Manager
 He /she is the person who has a complete understanding of all of the hotel’s booking, the future booking
style and the past histories of the hotel’s status i.e. arrival, occupancy, under stays, overstays, no – shows,
etc. Therefore, he plays a key role in increasing the hotel’s revenue or yield.

Yield management strategies

Minimum length of stay strategy
 It is a duration/time period based strategy which means that hotel must consider establishing a minimum
number of nights per stay because if they put this kind of strategy they can earn more revenue than before. It
gives more revenue because it reduces the chance of vacant rooms for a particular night due to continuous
guest occupancy.
  In order to make it success, majority of hotels apply discount policy or by selling free rooms or discount on
room on the first or last day of stay. This policy is more effective when any special event going to held in the
city.
 This strategy is mainly followed in resort properties, especially during peak occupancy periods. City hotels
may also use it during special events or high occupancy periods.

Close to arrival strategy

 It is a specific day based strategy in which hotel’s front office manager may put a kind of restriction that
useful in slowing down of demand on one night whereas increasing demands on the prior night. In simple
terms, it encourages arrivals on the night before where it is needed.
 It will not allow any new room reservations for that night but can allow for stay-overs. Hotel’s reservation
department only accept those bookings which overlapping on a given date. For instance, if Sunday was
already in a demand for a particular week while Saturday resembles a low demand, CTAR on the Sunday
night would be a good option to even out the demand (of Saturday). Additional arrivals on the peak arrival
date will not be accepted.

Hurdle rate strategy

 Hurdle rate is the lowest rate (or minimum possible rate) set by the front office manager for a given
date/period - based upon the anticipated demand. Hotel also offers several incentives to front desk for selling
rooms above the hurdle rate.

Sell through strategy

 This strategy is work on the principle of minimum length of stay restriction strategy except that the required
stay can begin before the date the strategy is applied.
 For instance, if a three night sell through applied on Wednesday, the sell through applies to Monday,
Tuesday and Wednesday. Arrivals on each of those day days must stay for three nights in order to be
acceptable.

Reports generated by Yield Management Software

1. Market segment report (customer mix information)
2. Booking graph/Calender Booking (Reservation status)
3. Future Arrival dates status report
4. Single arrival date history report
5. Weekly recap report
6. Room statistics tracking sheet

Results/Benefits of Yield Management Software

1. Consistency
2. Continuous Monitoring
3. Information Availability
4. Performance appraisal