Yield Management within the Hospitality and Services Industry

Introduction

Customers in the hospitality and other service industries are looking for the most desirable attributes of the services being offered for them. Seldom, the customers are also shifting their choices with the idea that all the offers should be cost-friendly. Because of the recognizable trend in customer behavior, the organization under the service industry are attempting to discover the most efficient way that will adds value to their brand name, while maintaining the number of the customers.

Background and Problem Statement

The idea of enhancing the areas involved in services became the center of the business leaders in managing the profitability. By then, the term Yield Management is introduced as the strategy in handling the service activities to make more profit even if there are limited areas involved in their services. Many businesses under the service industry are aware on the growing interests of the customers to get the best offer, and because of this truth, the yield management is emphasized (Selmi, 2008). The aim of the service-oriented companies to gain more customers and keep the relationship on the existing clients gives the ideal strategies to extend their offers, research for the effective intervention on services, and many more. In return, what is the impact of yield management among the hospitality and other service-oriented companies that implemented the type of strategy?

Research Aim and Objectives

The main aim of the study is to investigate the impact, as well as the importance of the yield management in strengthening the service industry. And in order to provide the necessary information regarding the yield management, there are three objectives that should be satisfy. First is to describe the nature of the business and how they implement the yield management. Second is to recognize the contribution of the employees in strengthening the service oriented organization. And third is to describe the influence of the technologies, business models, and other theories in formulating the unique yield management of the organizations.

Literature Review

One of the most common businesses under the service industry is the airlines. Through the implemented yield management, the airlines can use the discounted tickets to attract the customers with a limited period of time. This is effective in utilizing all the seats in the aircrafts. However, the related management reflected on the handling techniques of the airlines regarding the capacity of the aircraft in accordance to the prices and even in the services that included as a package, which in return adds to the total income. Because of the sophisticated from of managing both of the supply and demand, yield management is proposed to be the best service available to the customers which deliver what is only the best (Selmi, 2008). Therefore, there is a variety of concepts, analytical tools, and techniques applied in the service industry to solve their problems, which are commonly revolves in the allocating the limited resources but still providing the best service for the clients. Through directly targeting the issues involved in the services of the companies, the yield management can be generated. Again, the airline industry will be taken as an example. The yield management involved in the airline industry includes the overbooking, dynamic pricing, and innovative services. However, it is important for the business to provide the basic concepts and create the details in the application of the yield management in their service (Netessine & Shumsky, 2002). Because of the increasing numbers of the travelers who became price-insensitive, the airlines sophisticatedly applied price-discrimination strategies to evenly manage the various types of clients. Apparently, the yield management is identified to work well in the industries that require high initial investment and have perishable products. The airline seats might not decay in a manner but the time involved and the value will perish without producing the expected value if not utilized, therefore, the investment is wasted (Kaul, 2009).

Methodology

The suggested method in the study is the use of secondary information that will focus on the modern operations and management of the service-oriented companies. The materials that can be used as references can be the annual report of the organization, the case studies, and customer-based studies, and web-publications. The information that needs to obtain are the managerial focus of the organization in emphasizing the yield management. Therefore, it is important that the organization involved has the existing yield management in their system. In this manner, the study can organize the important information according to its aim.

References:

Kaul, S., (2009) Yield Management: Getting More Out of What You Already Have, Creativity Theme [Online] Available at: http://www.ericsson.com/ericsson/corpinfo/publications/ericsson_business_review/pdf/209/209_THEME_yield_management.pdf [Accessed 29 July 2010].

Netessine, S., & Shumsky, R., (2002) Yield Management [Online] Available at: http://mba.tuck.dartmouth.edu/pages/faculty/robert.shumsky/Yield_management_note.PDF [Accessed 29 July 2010]

Selmi, N., (2008) Yield Management: Impacts on Hotels and Customers [Online] Available at: http://turpade.org/docs/articulos/2008_OCT_Yield_Management.pdf [Accessed 29 July 2010].