Applications of Yield Management - Hotel Front Office Management

The best way to understand yield management is to apply it to various situations. Try your hand at the following scenarios to become familiar with the basics of yield management.

Scenario 1

A front office manager has reviewed the daily report, which reveals that 240 rooms were sold last night. The hotel has 300 rooms and a rack rate of $98. Using the following breakdown of room sales, determine the yield for last night:

85 rooms at $98
65 rooms at $90
90 rooms at $75

Scenario 2

The general manager has asked you to develop a block - out period for the October Annual Weekend Home coming event at The Times Hotel. There is a definite possibility of 100 percent occupancy, but the general manager is concerned that several of the alumni will dine off - premises. He would like a package rate, which will include a kick off breakfast and a dinner after the game. How will you proceed?

Scenario 3

A representative from the Governor’s Conference has requested a block of 200 rooms for three days at a $75 rate. This conference is attended by people who know how to entertain, and the projected food and beverage expenditure per person is quite significant.

During that same three - day time period, there is a jazz concert scheduled in the city. In the past, reservations from this group plus walk - ins have allowed you to achieve 100 percent occupancy (200 rooms) at a $135 rate (rack rate is $95). However, the jazz enthusiasts do not have a positive history of large food and beverage purchases. What would you do, and on what would you base your decision?

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