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Tour & Activity Industry Terms

What is Yield Management?

The concepts and techniques concerning the maximization of profit or revenue as well as the development of systems to best automate this process. The concept was first developed by airlines and is used to dynamically adjust pricing based on demand, capacity, seasonality, as well as other proprietary variables.  Hotels have recently begun using similar techniques to increase REVPAR by dynamically adjusting pricing during the peak season or times of high demand.

The concept of yield management is relatively new to the tour and activity segment but is an opportunity for tour operators to maximize their revenues and profits by creating rules around pricing and availability.  Tour operators can, for example, create rules that adjust pricing based on the day of week, discounting prices on slower days while increasing prices on weekends.  In addition, tour operators can control how much inventory is allocated to specific sales channels combining the benefits of both channel management and yield management.

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