A Short Season? You Should Become a Yield Management Expert

A Short Season? You Should Become a Yield Management Expert

Your business offers private sailboat charters off the coast during the warm weather months, and you love to take your clients out on breathtaking sailing adventures. The problem is, your tours only book up during the summer months, leaving you with empty spaces and lost revenue throughout the low travel season.

You don’t have to settle for a struggling business just because you operate in a destination with a short travel season. Instead, become a yield management expert.

What is Yield Management?

Yield management is a business practice that encourages managers to implement a variable pricing strategy. The pricing strategy would anticipate the behaviors of consumers during different time periods of the year, in hopes of maximizing revenue during the peak season and increasing revenue during the slow season.

For instance, tour and activity operators should avoid creating a set price for all of their tours that remains consistent throughout the year. When demand is higher in the summer, the price of the tours should increase. A sailboat charter during the busiest week of the summer should cost more than a charter during the slowest week of the peak season. When your products are in demand, consumers will pay more for them. This allows you to boost your profits while you have plenty of customers around to book your products.

Conversely, during the slow season, you can use yield management strategies to reduce your prices in order to drive additional business. You can offer steep discounts during the low season that allows you to book your sailing charters when they would not otherwise have been booked. By increasing your bookings during the slow season, you will increase your profits during a time when you expect business to be down.

How Can You Increase Revenue with Yield Management?

  • Create a mark-up pricing strategy. This is ideal during the peak travel season. Increase the cost of your tours significantly, but still offer a discount to customers who book. They feel like they are getting a good deal, but you are still earning a higher profit per tour than you do during the slow travel season. You will have more bookings during this time period, as your product is in higher demand, and you can use those excess earnings to stay afloat throughout the low season.
  • Create a mark-down pricing strategy. This is the price strategy you should utilize during the low season. This strategy requires you to reduce the cost of your tours during the low season in order to bring in additional customers. It helps you to boost your profits at a time when money can be tight.

You can easily apply your pricing strategies and improve your yield management skills by implementing a premier online booking system.

online booking guide

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