📖 ¿What is Yield?
Yield refers to the revenue generated from room sales compared to the hotel’s maximum potential revenue. Yield Management is the tactical practice of adjusting prices and availability based on demand to maximise room revenue.
📐 Formula
Yield (%) = (Actual Revenue / Maximum Potential Revenue) × 100
Maximum Potential Revenue = Number of rooms × Rack rate
🎯 Importance of Yield: Why it matters
Yield shows how close a hotel is to capturing its full income potential from room sales. It’s a key metric for short-term pricing decisions during high or low demand periods.
🏨 Practical example
A hotel has 80 rooms and a rack rate of £200:
- It sells 60 rooms at an average rate of £120 → £7,200
- Max potential: 80 × £200 = £16,000
- Yield = (£7,200 / £16,000) × 100 = 45%
This means the hotel is earning 45% of what it could make from its rooms.
🔄 Difference from Revenue Management
Yield Management focuses on pricing and occupancy to boost room income.
Revenue Management goes broader: it considers all revenue streams (rooms, F&B, events), guest segmentation, booking windows, stay length, distribution mix and demand forecasts.
👉 Yield is the tactic. Revenue is the strategy.
