How Hotels Manage Yield

If you’ve ever scored a Priceline deal on a hotel room, you know that your stay in “Room 212” can be costing you a much different price than the person in the identical “Room 213” is paying. Like airlines, hotels manage their inventory to maximize the revenue per room, selling as many rooms as they can at the highest rates possible while simultaneously appearing to charge everyone a reasonable rate and, at the end of the night, end up as full as possible.

Exactly how hotels do this is something of a mystery to we consumers. Purposefully so, of course: if we knew the drill, we could play the game back at them. And indeed frequent travelers know at least parts of the drill, and plan accordingly.

Today when I checked out of my Boston hotel the night auditor mistakenly printed my receipt over top of some pre-printed “yield management worksheet” forms that he’d left in the printer. He noticed the error of his ways, and offered to print me another receipt, but I said it was okay and left with it in hand. At the bottom was a “Notes/Strategy” section that offers a small peek into how hotels manage their inventory:

Notes on Hotel Yield Management

The truth of the “different prices for the same room” system was proved by a report that was left on the front counter of the hotel: it showed that prices charged for the room I paid $169 for last night varied by as much as $40 up and down.