Yield Management Plans: Automatic Rate Adjustments

TABLE OF CONTENTS

• Overview
• Setting up Yield Management Plans
  • Understanding the Example
  • Considerations for Yield Management Rules
• Applying Yield Management Plans
• Using Multiple Yield Management Plans
  • Considerations for Multiple Yield Management Plans
• Viewing Your Live Pricing

Overview

ThinkReservations offers a Yield Management tool designed to maximize your revenue by adjusting your rates in response to real-time supply and demand. This feature allows you to set up rules that automatically adjust your rates based on occupancy and booking window parameters that you set. In order to leverage this feature, you will first configure your Yield Management Plans, then apply them to your Rate Types.

Automatic Yield Management is a powerful time-saving tool that can capture opportunities to increase your revenue. However, before configuring this feature, you should review your rates to build out a dynamic structure that factors in your peak seasons and any peaks within your peak season. Having a strong foundation with intentional rate structuring will maximize the impact of the Yield Management tool and allow you to assess what Yield Management Rules make sense for your business - each business is different.

Setting up Yield Management Plans

To get started with Yield Management Plans, we'll review the steps to setting up a Yield Management Plan that applies to all rooms or room types:

1. Navigate to Settings ⟶ Yield Management Plans⟶ click the New button.
2. Name your Yield Management Plan and select the All Room Types option.
3. Configure your first rule - occupancy thresholds are required, and advanced booking windows are optional.
4. Add additional rules as needed by clicking the Add Rule button and then configuring.
5. Remove unwanted rules by clicking the X button on the right hand side of the corresponding row.
6. When you've completed your work, be sure to click the Save button in the bottom right.

Understanding the Example

Let's review the Yield Management Rules configured in the example above.

• Rule #1 says: If I have high occupancy (70% to 100%) and guests are searching for dates that are more than seven days out, I want to increase the price by 20 dollars. This rule applies only during the date range specified. 
• Rule #2 says: If I have medium occupancy (40% to 70%) and guests are searching for dates that are more than seven days out, I want to increase the price by 8 dollars. This rule applies to all dates. 
• Rule #3 says: If I have low occupancy (0% to 30%) and guests are searching for dates within the next seven days, I want to decrease the price by 10 percent. This rule applies to all dates.

For the booking range, don't forget 0 is a number! 1 day means tomorrow. 0 days means today.

Considerations for Yield Management Rules

Below are some additional considerations for creating Yield Management Rules:

• There are no limits to the number of rules you can create in one Yield Management Plan.
• Overlapping rules are cumulative.
• Yield Management is calculated per rate type based on the occupancy of the rooms within the room types that are enabled on that rate type.
• Your rules are based on occupancy percentages. Occupancy percentage varies based on the number of rooms included in the rate type.
  • Example 1: If your property has 10 rooms, but a rate type applies to only two of those rooms, Yield Management Plans applied to that rate type will calculate occupancy based on how many of those two rooms are available.
  • Example 2: If you have a yield management plan where you have indicated only some room types are eligible using the settings on the yield management plan, the occupancy is still calculated based on how many rooms are in the rate type, but the rule will only apply to the rooms indicated in the yield management plan.
• Blackouts count towards occupancy.
• Linked rooms count towards occupancy. For example, if you have a Whole House "room" option that results in your individual rooms being blocked when it's rented, you will need to include the Whole House "room" as part of your occupancy. 

Applying Yield Management Plans

Once you have created your Yield Management Plans, you can then apply them to any applicable rate types using the steps below:

1. Navigate to Settings ⟶ Rate Types ⟶ click on the rate type to open it.
2. On the Details tab and in the Pricing section, click the "Add Plan" button and select the appropriate Yield Management Plan from the dropdown menu.
3. Once your selections are complete, click the Save button in the bottom right.

Using Multiple Yield Management Plans

You may want to take advantage of multiple Yield Management plans to make occupancy and advanced booking pricing adjustments that vary for different room types. For example, perhaps your property has a combination of Guest Suites and Villas. You may want to apply a more modest increase as availability becomes more scares in your Suites and a steeper increase as availability becomes more scarce in your Villas.

To accomplish this, follow the steps below:

1. When creating your Yield Management Plans, choose the "Some Room Types" option and select the rooms to which this plan should apply.
2. Next, navigate to Settings ⟶ Rate Types ⟶ choose the rate type to which these rules should apply.
3. On the Details tab and in the Pricing section, click the "Add Plan" button and select the appropriate Yield Management Plan from the dropdown menu. 
4. Click "Add Plan" again, and continue to add as many Yield Management Plans as you need.
5. Once your selections are complete, click the Save button in the bottom right.

Considerations for Multiple Yield Management Plans

• The same Yield Management Plan may be applied to multiple Rate Types. Similarly, each rate type can have a unique Yield Management plan.
• It is recommended that only one Yield Management Plan should be applied to each room type to avoid unintended price adjustments. For example, if you choose to apply multiple Yield Management Plans to the same rate type, we recommend applying each Yield Management Plan to a unique subset of room types.

Viewing Your Live Pricing

When you add new Yield Management Plans or make changes to existing plans, you will not see these reflected in your rate type calendar. Why? Because this is where you set the base rates. 

How do you see the changes?  

1. On your reservation Calendar
   • Navigate to your reservation calendar using the Calendar link in the top menu.
   • Click the View dropdown menu and select "Show Rates" 
   • The prices you see on the calendar will reflect any adjustments made by your Yield Management Plans.
2. On your Booking Engine
   • Navigate to your Booking Engine from your website or from Settings ⟶ Booking Engine and click on the Booking Engine URL at the top of the page.
   • Search for availability on the dates you would like to check.
   • The prices you see on the booking engine will reflect any adjustments made by your Yield Management Plans.

For more considerations and examples of Yield Management Strategy, read the support article titled Considerations for Automatic Yield Management.

Related: Manual Yield Management, Considerations for Automatic Yield Management