One for all and all for one, a comparison of everyday low pricing and yield management strategies in the hotel industry

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Abstract

As a consequence of the deregulation of the US airline industry in the 1970s, Yield Management was developed as a management tool for enhancing profit and maintaining competitive advantage. To date, it has gained widespread adoption in a number of service industries where it assists the manager to profitably match variable demand with fixed capacity. However, while yield management practices have been linked with increasing levels of profitability, many service industries have profitably pursued a seemingly opposite strategy of one basic, no-frills product offer for all. This paper examines the factors that encourage some service organisations to utilise yield management techniques whilst others resort to offering low cost, no frills pricing approaches. Exploratory research of a sample of UK hotels demonstrates that whilst uniform pricing is indeed likely to be associated with a low price position, no evidence was found that yield management approaches to pricing are likely to be associated with simple service offers or organisations that only target a small number of market segments.
LanguageEnglish
Pages249-258
JournalJournal of Targeting, Measurement and Analysis for Marketing
Volume8
Issue number3
Publication statusPublished - 2000

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Pricing
Industry
Likely
Profitability
Profit
Strategy
Hotel industry
Management strategy
Yield management
Target
Demonstrate
Service industries

Cite this

@article{818fa007e4cb4f24b6fbe42a7d996361,
title = "One for all and all for one, a comparison of everyday low pricing and yield management strategies in the hotel industry",
abstract = "As a consequence of the deregulation of the US airline industry in the 1970s, Yield Management was developed as a management tool for enhancing profit and maintaining competitive advantage. To date, it has gained widespread adoption in a number of service industries where it assists the manager to profitably match variable demand with fixed capacity. However, while yield management practices have been linked with increasing levels of profitability, many service industries have profitably pursued a seemingly opposite strategy of one basic, no-frills product offer for all. This paper examines the factors that encourage some service organisations to utilise yield management techniques whilst others resort to offering low cost, no frills pricing approaches. Exploratory research of a sample of UK hotels demonstrates that whilst uniform pricing is indeed likely to be associated with a low price position, no evidence was found that yield management approaches to pricing are likely to be associated with simple service offers or organisations that only target a small number of market segments.",
author = "U McMahon-Beattie and A Palmer",
note = "Reference text: 1. Kimes, S. (1997) {"}Yield Management: an overview{"}. In Yield Management, Strategies for the Service Industries. (Eds) Yeoman, I and Ingold, A., Cassell:London., pp. 3-11. 2. Kimes, S. (1989) {"}The Basics of Yield Management{"}, Cornell Hotel and Restaurant Administration Quarterly, Vol.30, No.3, pp.14-19. 3. Donaghy, K., McMahon, U. and McDowell, D. (1995) {"}Yield Management: An Overview{"}, International Journal of Hospitality Management, Vol.14, No.2, pp. 139-150. 4. Anderson, A. (1996), Yield Management in Small to Medium Sized Enterprises in the Tourism Industry, European Commission, DGXXIII, Tourism Unit. 5. Sieburgh, J.A. (1988) {"}Yield Management at Work in the Royal Sonesta{"}, Lodging Hospitality, October, pp.235-237. 6. Lieberman, W.H. (1993) {"}Debunking the Myths of Yield Management{"}, Cornell Hotel and Restaurant Administration Quarterly, Vol.34, No.1, pp. 34-44. 7. Cross, R. (1997), Revenue Management, New York:Broadway Books. 8. Donaghy, K. and McMahon, U. (1995) {"}Managing Yield: A Marketing Perspective{"}, Journal of Vacation Marketing, Vol.2, No.1, pp. 655-62. 9. Donaghy, K., McMahon-Beattie, U., Yeoman, I. And Ingold, A. (1998) {"}The Realism of Yield Management{"}, Progress in Tourism and Hospitality Research, No.4,pp. 187-195.",
year = "2000",
language = "English",
volume = "8",
pages = "249--258",
journal = "Journal of Targeting, Measurement and Analysis for Marketing",
issn = "0967-3237",
number = "3",

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TY - JOUR

T1 - One for all and all for one, a comparison of everyday low pricing and yield management strategies in the hotel industry

AU - McMahon-Beattie, U

AU - Palmer, A

N1 - Reference text: 1. Kimes, S. (1997) "Yield Management: an overview". In Yield Management, Strategies for the Service Industries. (Eds) Yeoman, I and Ingold, A., Cassell:London., pp. 3-11. 2. Kimes, S. (1989) "The Basics of Yield Management", Cornell Hotel and Restaurant Administration Quarterly, Vol.30, No.3, pp.14-19. 3. Donaghy, K., McMahon, U. and McDowell, D. (1995) "Yield Management: An Overview", International Journal of Hospitality Management, Vol.14, No.2, pp. 139-150. 4. Anderson, A. (1996), Yield Management in Small to Medium Sized Enterprises in the Tourism Industry, European Commission, DGXXIII, Tourism Unit. 5. Sieburgh, J.A. (1988) "Yield Management at Work in the Royal Sonesta", Lodging Hospitality, October, pp.235-237. 6. Lieberman, W.H. (1993) "Debunking the Myths of Yield Management", Cornell Hotel and Restaurant Administration Quarterly, Vol.34, No.1, pp. 34-44. 7. Cross, R. (1997), Revenue Management, New York:Broadway Books. 8. Donaghy, K. and McMahon, U. (1995) "Managing Yield: A Marketing Perspective", Journal of Vacation Marketing, Vol.2, No.1, pp. 655-62. 9. Donaghy, K., McMahon-Beattie, U., Yeoman, I. And Ingold, A. (1998) "The Realism of Yield Management", Progress in Tourism and Hospitality Research, No.4,pp. 187-195.

PY - 2000

Y1 - 2000

N2 - As a consequence of the deregulation of the US airline industry in the 1970s, Yield Management was developed as a management tool for enhancing profit and maintaining competitive advantage. To date, it has gained widespread adoption in a number of service industries where it assists the manager to profitably match variable demand with fixed capacity. However, while yield management practices have been linked with increasing levels of profitability, many service industries have profitably pursued a seemingly opposite strategy of one basic, no-frills product offer for all. This paper examines the factors that encourage some service organisations to utilise yield management techniques whilst others resort to offering low cost, no frills pricing approaches. Exploratory research of a sample of UK hotels demonstrates that whilst uniform pricing is indeed likely to be associated with a low price position, no evidence was found that yield management approaches to pricing are likely to be associated with simple service offers or organisations that only target a small number of market segments.

AB - As a consequence of the deregulation of the US airline industry in the 1970s, Yield Management was developed as a management tool for enhancing profit and maintaining competitive advantage. To date, it has gained widespread adoption in a number of service industries where it assists the manager to profitably match variable demand with fixed capacity. However, while yield management practices have been linked with increasing levels of profitability, many service industries have profitably pursued a seemingly opposite strategy of one basic, no-frills product offer for all. This paper examines the factors that encourage some service organisations to utilise yield management techniques whilst others resort to offering low cost, no frills pricing approaches. Exploratory research of a sample of UK hotels demonstrates that whilst uniform pricing is indeed likely to be associated with a low price position, no evidence was found that yield management approaches to pricing are likely to be associated with simple service offers or organisations that only target a small number of market segments.

M3 - Article

VL - 8

SP - 249

EP - 258

JO - Journal of Targeting, Measurement and Analysis for Marketing

T2 - Journal of Targeting, Measurement and Analysis for Marketing

JF - Journal of Targeting, Measurement and Analysis for Marketing

SN - 0967-3237

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ER -