TO YIELD OR NOT TO YIELD
That’s the question!

By Yvo van der Tol, Account Director - Benelux
Marriott Hotels International Limited

Travellers experience every day the magic of yielding the seats, rooms and rental cars. One day you can have a bargain and with changing the arrival or departure of your reservation the price will take it to the other side of the spectrum.

There is still a gap between perception and the way prices are made in real live.

Let’s go back to the future.  The hotels used to ask the intermediary for the end client when the business source was not clear. At one point the intermediary refused to share the end client, and after asking some questions about the reason for this, the truth popped up. The client was a large pharmaceutical client and the intermediary was afraid that the prices will go up because of a wider budget that they are able to spend. This would be an interesting yield perspective from a hotel nowadays, just see the client profile and come up with the price. Sure that the hotel industry will receive a lot of Chinese student groups with limited budgets from these intermediaries. This brought us to the question; how does it work then?

The yield manager is more interested in the rooms that he can not sell because of the group request and the displaced revenue because of this. This is for the moment the biggest difference between the sales manager, who will be more focused in filling the rooms, and the yield manager who is more interested in the right client, right time, and right price principle of yielding. Over the last years yield and sales are growing more and more towards each other as they start to better understand each other worlds. The yield manager in a hotel used to report to the Director of Sales, nowadays the yield manager is a department on his own and directing the sales force to go out there to generate the right priced and qualified business.

Always feel sorry for the junior sales executives banging on the company doors to capture a lead and then hearing from the yield manager that this group will be too big for that period, wrong pattern although they are able to pay the daily rate of this venue for that period. He needs to return to the client that this is not possible in the hotel, although the rooms are open for the moment to be picked up, but it will block higher potential business that normally comes in during these periods. Offering rates to compensate the lost revenue opportunites would be putting the rates outside of the clients price window.  This group wanted to have the whole hotel on a Wednesday including all meeting spaces during peak season. From a yield perspective this group needs to be redirected to another period or day in the week. This airport hotel will run like hell when this request was made for a Monday or Friday, not even talking about the weekend.
 
See you already think…….which participant will be come to my conference on a Monday or Friday?
This is depending on your targeted group, when you need to have an internal international meeting some companies would be able to do so, especially when you talk about the savings for the company. Just a simple calculation needs to be made. Get the prices for a Tuesday until Thursday night and then get this compared with the offer you just received for the alternative dates. This will definite “tick” the purchasing or travel manager as you can make your yielding very concrete and even better you are able to put a cash value on this!

When the company is not possible to change the dates or months, do agree that it looks strange to have the year end sales meeting in August, but it would be good to look into alternative months for certain more flexible meetings. With the savings made out of these overnight stays and travel your department will be able to do more with less, or spend the saving on the periods that they can not change the dates.

Did you ever think about National bank holidays? As long as all the services are open in the city and your participants are not coming out of this country it would be an excellent way to make yield work for you.  President’s day, religious days of the country…

Another method that can be very effective in yielding your conferences will be getting the prework well done. Make a list of key points that the destination needs to offer. This could be good connections from certain countries, climate, culture… Often we see that the decision maker already has a strong preference for a certain region or city and they start to check the hotels within this city. With getting the key points right you might be able to look into destinations that did not pop up on the raderscreen but offer great value for money and do fulfil al the tick boxes of the decision maker.

The main message is that it will be interesting to yield your meetings on your side as well as the other side is doing. You will have great opportunities for impressive meetings and savings as well. If you are not sure about the best dates? Ask the hotel as they will be delighted to direct you to their need periods as well.