At MedPlaya Management Services we are experts in hotel management and marketing, and our goal is that our clients maximizing the potential of your assets.
To achieve this goal, we offer a comprehensive, professional and efficient management, and we use innovative methods that guarantee sustained and effective growth. One of the most effective methods that we use in the field of the hotel industry is Yield Management, and below we will explore what this concept is and what are the advantages it can bring to your business.
Yield Management in the hotel business: why is it important?
Yield Management or performance management is a Price strategy used in the hotel industry to maximize revenue by adjusting room rates based on supply and demand. This pricing strategy is also known as Revenue Management.
The objective? Sell each room at the highest price possible and maintain a high occupancy. In short, increase your income and profitability.
Yield Management involves analysing data such as historical booking trends, competitive prices, and other market factors to determine the optimal price for each room. Prices can change daily, and even hourly, based on fluctuations in demand.
By adjusting room prices and sales to reflect demand, hotels can avoid the common problem of overselling, which can lead to lost revenue and dissatisfied customers. In addition, Yield Management can also help hotels to identify periods of high and low demand, allowing them to adjust staffing levels and other resources accordingly.
The MedPlaya Management Services process to apply Yield Management
MedPlaya Management Services trusts in its Yield Management strategy for the businesses in its portfolio due to its competitiveness and good results. This method uses a systematic approach that involves analysing data, forecasting demand, and adjusting room rates based on market trends.
The implementation of this strategy allows us to:
- Analyze historical data:To identify patterns and trends in demand, such as seasonal fluctuations, weekend vs. weekday occupancy rates, and average length of stay.
- Monitor market trends: Be aware of competitive prices, industry events and other factors that may affect hotel demand.
- Anticipate demand: Use data analysis and market trends to forecast demand, and thus adjust room rates to reflect expected demand.
- Use dynamic prices:Adjusting room rates in real time based on fluctuations in demand can help maximize revenue during periods of high demand.
- Offer promotions strategically: Promotions and discounts help attract customers during periods of low demand, although offering discounts during periods of high demand should be avoided.
- Optimize room inventory: Data analysis and demand forecasting will help optimize inventory, ensuring the right mix of room types are available at the right time.
- Use technology: Performance management software and other technologies help us gain agility and maximize efficiency.
DUETTO RMS, a key tool for MedPlaya Management Services
A Revenue Management system is key for hotels to maximize hotel revenue and make decisions based on data analysis. A good RMS can create efficient inventory on hotel availability, increase ADR and maximize your profitability. A good RMS strategy will help hotels understand historical and future data, as well as market dynamics and economic conditions that can affect guest price sensitivity.
At MedPlaya Management Services we use one of the best Revenue Management (RMS) providers in the hotel industry: DUETTO. This application provides us with information on demand, rate optimization, management of the different segments with which we currently work, as well as reports and quality analysis that are integrated with the different systems with which we work.
Having an efficient RMS can help define a reliable pricing strategy, understand demand trends, and determine the most profitable segments for hotels.
Groups and the MICE segment represent an important part of the business for MedPlaya Hotels and with DUETTO technology we can control these segments and thus make a good forecasting Of demand.
In addition, with the DUETTO philosophy related to dynamic prices, we can optimize and increase ADR at the room type level through the price rules. This strategy means that we can set prices based on unique inventory or the availability of another room type, and this will increase the ADR for those superior rooms.
Packages are also an excellent source of business and represent one of the most bookable segments in tourist destinations. DUETTO’s business rules model allows users to set dynamic prices for packages based on season and demand conditions, allowing rates to fluctuate in line with the demand.
Managing pricing strategies when selling to online travel agencies like Booking.com
When MedPlaya Management Services sells to online travel agencies (OTAs) like Booking.com, it also drives pricing strategies using a dynamic that adjusts room rates in real time based on market demand.
To manage pricing strategies when selling to OTAs, MedPlaya Management Services takes into account the following points:
- Understanding OTA commission rates: Commission rates can vary significantly, which is why it is very important to understand them and adjust room rates accordingly.
- Use dynamic prices:Implementing a dynamic pricing strategy that adjusts room rates in real time based on market demand can help maximize revenue during periods of high demand and avoid pricing too low during periods of low demand.
- Offer exclusive rates: It is convenient to offer promotions to customers who come through OTAs to encourage reservations and increase revenue.
- Optimize room inventory: Data analysis and demand forecasting help optimize room inventory, ensuring the right mix of room types is available on OTAs at the right time.
- Monitor competitor prices: Keep an eye on competitive prices on OTAs and adjust room rates accordingly to stay competitive.
- Negotiate commission rates: It is important to negotiate commission rates with OTAs to reduce costs and increase profitability.
- Take advantage of OTA analytics: OTA analytics tools allow you to monitor booking trends and adjust pricing strategies accordingly.
Maximizing revenue is crucial for hotels, and performance management is the key strategy to achieve this goal.
With the Yield Management strategy, at MedPlaya Management Services we effectively predict demand and align it with supply and prices to find the perfect balance.
If you are looking to optimize the potential of your business, we are here to help you. Contact us to learn more and unlock your hotel’s revenue potential thanks to the Yield Management strategy!
