Measuring Yield : Yield Management

The Yield Statistic is the Ratio of the Actual Revenue (Generated by the Number of Rooms Sold) to Potential Revenue (THE Amount of Money that would be received from the Sales of Rooms in the Hotel at a Rack Rate)

Formula 1: Potential Average Single Rate:

♦Potential Average Single Rate = (Single Room Revenues at Rack Rate) / (Number of Rooms Sold as Single)

Formula 2: Potential Average Double Rate:

♦Potential Average Double Rate = (Double Room Revenue at Rack Rate) / (Number of Rooms Sold as Double)

Formula 3: Multiple Occupancy Percentage:

♦Multiple Occupancy Percentage = (Number of Rooms Occupied by more than 1 Person) / (Total Number of Rooms Sold)

Formula 4: Rate Spread:

♦Rate Spread = (Potential Average Double Rate) – (Potential Average Single Rate)

Formula 5: Potential Average Rate:

♦Potential Average Rate = (Multiple Occupancy Percentage * Rate Spread) + (Potential Average Single Rate)

Formula 6: Room Rate Achievement Factor:

♦Room Rate Achievement Factor = (Actual Average Rate) / (Potential Average Rate)

Formula 7: Yield Statistic:

1. Yield Statistic = (Actual Rooms Revenue) / (Potential Rooms Revenue)
2. Yield Statistic = ((Rooms Nights Sold) / (Rooms Nights Available)) * ((Actual Average Room Rate) / (Potential Average Rate))
3. Yield Statistic = Occupancy Percentage * Achievement Factor

Formula 8: Identical Yields Occupancy:

♦Identical Yields Occupancy = (Current Occupancy Percentage) * (Current Rate / Proposed Rate)

Formula 9: Equivalent Occupancy:

1. Equivalent Occupancy = (Current Occupancy Percentage) * ((Rack Rate – Marginal Cost) / (Rack Rate * ((1 – Discount Percentage)) – Marginal Cost)
2. Equivalent Occupancy = (Current Occupancy Percentage) * ((Contribution Margin) / (New Contribution Margin))

If you find difficulty understanding above here is a pdf demonstrating Yield Measurement formula with an example.