Which practice is commonly associated with yield management?

• A. Setting a single price for all rooms
• B. Segmenting customers and varying prices based on demand
• C. Ignoring booking pace
• D. Offering only non-refundable rates

Answer: (B)

Yield management centers on adjusting price and inventory in response to demand to maximize revenue. In hospitality, this means pricing that reflects who the guest is and how strong demand is at any given time. The practice of segmenting customers and varying prices based on demand is exactly how yield management works: different groups (for example, business travelers vs. leisure travelers) and different times (peak vs. off-peak days) are charged different rates to capture the highest willingness to pay while still filling rooms.

This approach helps optimize revenue by leveraging price discrimination and inventory control—booking windows, day of week, length of stay, and other factors influence what price point makes the most sense.

Setting a single price for all rooms eliminates pricing power and ignores demand signals. Ignoring booking pace means you’re not responding to how quickly rooms are moving, which is a key input for adjusting prices. Offering only non-refundable rates can be a tactic within pricing, but by itself it doesn’t describe yield management, which is about segmenting and dynamically changing prices based on demand.