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

U McMahon-Beattie, A Palmer

Research output: Contribution to journal › Article

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

Fingerprint

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

Cite this

McMahon-Beattie, U ; Palmer, A. / One for all and all for one, a comparison of everyday low pricing and yield management strategies in the hotel industry. In: Journal of Targeting, Measurement and Analysis for Marketing. 2000 ; Vol. 8, No. 3. pp. 249-258.
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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.",
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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.",
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McMahon-Beattie, U & Palmer, A 2000, 'One for all and all for one, a comparison of everyday low pricing and yield management strategies in the hotel industry', Journal of Targeting, Measurement and Analysis for Marketing, vol. 8, no. 3, pp. 249-258.

One for all and all for one, a comparison of everyday low pricing and yield management strategies in the hotel industry. / McMahon-Beattie, U; Palmer, A.

In: Journal of Targeting, Measurement and Analysis for Marketing, Vol. 8, No. 3, 2000, p. 249-258.

Research output: Contribution to journal › Article

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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.

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McMahon-Beattie U, Palmer A. One for all and all for one, a comparison of everyday low pricing and yield management strategies in the hotel industry. Journal of Targeting, Measurement and Analysis for Marketing. 2000;8(3):249-258.