What term describes a system of maximizing revenue by adjusting room rates according to demand?

• A. Yield management
• B. Dynamic pricing
• C. Revenue optimization
• D. Market segmentation

Answer: (A)

Yield management is a pricing and inventory-control approach used in hospitality to maximize revenue when room supply is fixed in the short term. It combines demand forecasting, customer segmentation, and strategic control of inventory and pricing to sell the right room to the right guest at the right time for the right price. This tightly links rate changes to anticipated demand, which is exactly what maximizing revenue through fluctuating room rates aims to do.

Dynamic pricing describes the pricing adjustments themselves, which are a component of yield management but not the full system. Revenue optimization is a broader idea that can apply to many aspects beyond room rates, and market segmentation focuses on dividing customers into groups rather than the rate-and-inventory strategy used to boost revenue.