StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Why Yield Management Is Important To Hotels - Essay Example

Cite this document
Summary
This research explores why yield management is important to hotels and discusses the advantages and disadvantages of the organization, its employees, and customer…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER98.3% of users find it useful
Why Yield Management Is Important To Hotels
Read Text Preview

Extract of sample "Why Yield Management Is Important To Hotels"

 Explain why yield management is important to hotels and critically discuss the advantages and disadvantages for the organization, its employees and customer. 1. Introduction Profitability can be characterized as one of the key criteria for evaluating a firm’s performance. This means that the revenues of each organization are the basis for characterizing the firm as successful or not in its industry. Of course, the balance between profits and expenses/ losses is necessarily taken into consideration when developing such task. Current paper focuses on the potential value of ‘revenue management, also known as yield management’ (Dopson & Hayes 2008, p.308) to hotels. In the context of hotel industry, yield management is a term used for describing a high range of techniques through which occupancy is appropriately managed so that the profits of a hotel are increased (Dopson & Hayes 2008, p.308). Therefore, yield management is quite important to hotels. However, in practice it has been revealed that yield management can also have a series of implications for the organization, its employees and customers; this issue is discussed below using literature published in this field. 2. Yield management – importance and implications for hotels Yield management in the hotel industry has a series of advantages. Baker, Huyton & Bradley (2001) note that yield management, if it is used in the particular industry, it can lead to ‘the increase of a room’s revenue and of its space’ (Baker, Huyton & Bradley 2001, p.291). It is explained though that yield management can play the above role only if staff is appropriately trained for offering customer service of high quality (Baker, Huyton & Bradley 2001, p.291). In other words, low employee efficiency can eliminate the value of yield management, either in the short or the long term. In any case, the value of yield management, as a key concept in the hotel industry, cannot be doubted. Indeed, yield management can highly benefit the hotel industry. The potential for accurate forecasting is considered as one of the most important advantages of yield management systems (Hsu & Powers 2001, p.261). However, the above benefit can be available only in hotels that use advanced IT systems that can monitor every organizational activity and provide accurate information in regard to the organization’s strengths and weaknesses (Hsu & Powers 2001, p.261). Yield management can also help hotel managers to make effective plans in regard to the potential expansion of the organization. For example, in order for a hotel to enter a foreign market, it would be necessary for the hotel’s managers to have an accurate view of the hotel’s profitability so that they are able to check whether the risk of potential losses could be undertaken or not (Hsu & Powers 2001, p.262). In other words, yield management is a critical tool for developing effective strategic plans. Moreover, Harris & Mongiello (2012) note that yield management can increase the competitiveness of a hotel proving valuable information in regard to the hotel’s internal and external environment, especially in regard to the position of competitors but also in regard to those processes that distinguish the hotel within its industry. Despite its value, yield management can be related to certain disadvantages. According to Abdel-Kader (2011) one of the most important disadvantages of yield management is related to its needs in terms of information. Indeed, a yield management system is based on a variety of information, related to all business activities (Abdel-Kader 2011, p.505). In practice, it has been proved that the data required for the efficient operation of a yield management system may not be available, a phenomenon more common today that yield management systems used in most hotels have become quite complex (Abdel-Kader 2011, p.505). Moreover, it has been proved that yield management cannot perform well under specific conditions, as for example in the following cases: a) ‘when a hotel serves a single market segment or b) when a hotel has less than 50 rooms, i.e. in a hotel that has low occupancy rates’ (Abdel-Kader 2011, p.505). This means that yield management systems are primarily designed for supporting the operations of hotels that are already well established in the market. At the next level, Weber & Chon (2002) note that today yield management has been highly developed compared to the past. The systems of yield management currently used in hotels worldwide can be so complex that they can be only managed by highly skilled staff (Weber & Chon 2002, p.198). For example, there are hotels where yield management is developed by individuals working exclusively on this subject (Weber & Chon 2002, p.198). This trend leads to the following assumption: in order to be able to respond to the needs of yield management, hotels operating in the modern market need to establish relevant training programs, ensuring that all employees involved in the particular activity are appropriately skilled. Bowie & Buttle (2012) also highlight the high dependency of yield management on IT systems. The above researchers not that yield management systems can fail in providing accurate image of organizational performance when the data entered in these systems are not accurate (Bowie & Buttle 2012, p.168). Even minor mistakes when typing data that will be used by a yield management system can eliminate the accuracy of the information provided by the above system (Bowie & Buttle 2012, p.168). The over-dependency of yield management on IT systems has been considered as the most significant disadvantage of the particular framework. 3. Conclusion When having to evaluate the effectiveness of yield management systems, the following issue needs to be explored: are the managers involved in the relevant processes appropriately skilled in order to respond to the system’s requirements? Also, even if a yield management system has successfully operated for a particular period of time, its effectiveness in the long term cannot be secured. As explained through the literature provided above, yield management can significantly benefit hotels but only under certain terms. The efficiency and appropriateness of resources involved are of critical importance in hotels that are based on yield management systems. If compared, the benefits of these systems can be considered as more important than their disadvantages, under the terms that in modern hotels the quality of IT systems and the training of employees are highly supported. (Words 1016) References Abdel-Kader, M. (2011). Review of Management Accounting Research. London: Palgrave Macmillan. Baker, S.,Huyton, J. & Bradley, P. (2001). Principles of Hotel Front Office Operations. Belmont: Cengage Learning EMEA. Bowie, D. & Buttle, F. (2012). Hospitality Marketing. London: Routledge. Dopson, L. & Hayes, D. (2008). Managerial Accounting for the Hospitality Industry. Hoboken: John Wiley & Sons. Harris, P. & Mongiello, M. (2012). Accounting and Financial Management. London: Routledge. Hsu, C. & Powers, T. (2001). Marketing Hospitality. Hoboken: John Wiley and Sons. Weber, K. & Chon, K. (2002). Convention Tourism: International Research and Industry Perspectives. London: Routledge. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Why Yield Management Is Important To Hotels Essay”, n.d.)
Why Yield Management Is Important To Hotels Essay. Retrieved from https://studentshare.org/management/1608433-please-see-the-attachment
(Why Yield Management Is Important To Hotels Essay)
Why Yield Management Is Important To Hotels Essay. https://studentshare.org/management/1608433-please-see-the-attachment.
“Why Yield Management Is Important To Hotels Essay”, n.d. https://studentshare.org/management/1608433-please-see-the-attachment.
  • Cited: 0 times

CHECK THESE SAMPLES OF Why Yield Management Is Important To Hotels

Report Topic:Assess the business structure of one hotel group

It is the yield management ethos and the process that help to identify the trends of demand at Hilton.... hellip; This includes contract catering, hospitality services, bars and clubs, pubs, hotels and restaurants (Morton-Holmes, 2009).... Furthermore, the hotel chain today is one of the leading global hospitality companies that span from luxurious resorts and hotels to mid priced hotels and extended-stay suites.... The hotel's performance in respected consumer surveys confirms that the hotel is taking all possible measures that are important in order to meet the needs of the customers....
4 Pages (1000 words) Essay

Yield Management at Aldemar

yield management is a growing practice among leading business enterprises in order to manage its unique resources in the best possible manner.... This is also the main reason that yield management is so important for Aldemar.... Another approach to capacity management is product development that falls under the category of demand management.... Running Head: ALDEMAR HOTELS AND SPA Aldemar Hotels and Spa [The name of the writer will appear here] [The name of the institution will appear here] [The name of the Professor] [Course] Why is yield management so important for Aldemar?...
4 Pages (1000 words) Essay

Kempinski Hotels in United Arab Emirates

The focal point of this paper is to evaluate and analyze Kempinski hotels in United Arab Emirates.... It should be mentioned that the Kempinski group of hotels are one of the leading players in the hospitality industry with a history of around 180 years.... The Kempinski hotels ventured into UAE lately and at this date their hotel is regarded as high profile feature in the region. … 1) In terms of industry like cycle it can be stated that the Kempinski hotels in United Arab Emirates, particularly the one in Ajman, situated at the Sheikh Humaid Bin Rashid Al Nuaimi Street, is the most featured hotel of UAE....
5 Pages (1250 words) Essay

Improving Interactions between Meeting Planners and Hotel Employees

iterature ReviewMeeting planners can provide hotels with substantial revenue.... Meeting planners can provide hotels with substantial revenue.... The method involves the development of an understanding of the perceived service needs of target customers (12 Manage management Communities, 2007).... The method involves the development of an understanding of the perceived service needs of target customers (12 Manage management Communities, 2007)....
8 Pages (2000 words) Research Paper

Wheatley Park Hotel Revitalisation Plan

The report is prepared in consultation with the hotels… , suppliers, and directors (Grand Cosmopolitan) who have entrusted me as the principal administrator to embark on a strategy that will halt the decline of the hotel's revenue and unto a journey of progressive growth. In this report an analysis has been conducted into what Consultations with all the stake holders was emphasised to garner why the hotel continues to suffer unremitting losses....
12 Pages (3000 words) Essay

Review one concept or practice that has been applied in one aspect of tourism management

The paper shows that revenue management (which can be identified as yield management) is a very popular management strategy by companies having scarce capacities.... hotels must know implement the revenue management in order to bail out the declining hotel room volume brought about by the economic crisis.... The articles show that the hotel industry's financial success is ground on offering the… The first article Revenue management: The Impact on Business –to –Business Relationships (Brefni Noone, Sheryl Kimes, Leo Renaghan, 2003) shows there is a direct link between revenue management and business to business The article conducted a research into a company and its key accounts....
12 Pages (3000 words) Essay

Hospitality Learning

t this point, it would be important to note the role that Hotel Management course plays in opening up one's mind to appreciate that hospitality encompasses more than just hotels.... With the growth in the hospitality industry in the period between 1980s and 1990s, there was need for professionals specifically trained in this field who would propel the essence of… With hotels being “home away from home,” then hotel management forms a critical component of the hospitality industry. Taking the course of Hotel Management has made me appreciate hospitality as an industry that Hospitality Learning Hospitality learning or management is relatively new as a field of business in the world....
2 Pages (500 words) Essay

Tourism Marketing: the Radisson Blu Hotel

The following essay “Tourism Marketing: the Radisson Blu Hotel” seeks to implement the processes of strategic thinking and planning towards the achievement of business objectives as indicated in the Radisson Blu Edwardian Group of hotels.... hellip; The author states that the main value of strategic thinking as indicated in Radisson Blu Group hotels is to develop a management strategy that is the unifying, coherent, and integrative framework for decision making especially about resource utilization....
6 Pages (1500 words) Book Report/Review
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us