PERCEIVED FAIRNESS OF YIELD MANAGEMENT
Applying yield-management principles to rate structures is complicated by what consumers
perceive as unfair practices.
Yield- management is increasing and well accepted in industries like airlines but customers are not well-known of yield management in other industries. I think the main factor is because airlines have been using it longer than any otherindustry that´s why customers accepted so they know that if they pay their fares with certain restrictions they would get benefits.
In hotels or cruises clients pay different prices depending in which room are they going to stay and what different services they are expecting to have if they doesn´t receive what they are expecting for the price they may say that the situation is unfair and the increasein revenues may be a short-term.
* What´s yield management?
Is a system or method which helps to sell to the right person, at the right time and the right price.
The beginning of this is since airplanes can´t fill the planes with full-fare customers so they try to fill them by selling reduced fares, each airline decides how many reduced fares have to sell making sure they have enough seats forlate-booking. Yield management has worked to airplanes because they can provide more revenue from fixed capacity for this reason other industries like car-rental, cruise-line and freight-transport have tried to adapt this concept because if you see that something it´s working you will try to make it.
Hoteliers manage it by selling rooms at deeply discount rate while otherwise they will be vacantso the revenues is better. In airlines people seems they are identify with this but for example in a hotel if a customer notice he or she payed more for a room than another customer he´ll think it´s not fair and maybe he will never return back.
* Perceived fairness
Here the researchers use the concept of “ reference transaction” which is how customers think a transaction should be conductedand how much a given service should cost. For example if the hotel increases the cost of the room with no apparently reason or the opposite if the hotel lower the rate with restrictions, customers may view this actions as unfair.
Three hypotheses emerge:
1. Customers think raising prices to maintain profits it´s fair reasonable the service increase.
2. Customers believe raising prices toincrease profits it´s unfair.
3. If costs decrease, customers believe it´s fair to maintain the same price this may be because customers think are paying what they think they should.
* How to increase the price?
One method is to increase the reference price. Simply put, that means increasing the rack or full-fare rate. Another method of increasing price is to attach additional services orproducts to the services sold at the increased price. For example, additional amenities, meal or drink discounts or incentives for future business can be offered. Third, the service can be sold as part of a package obscuring the price of the service. The fourth method is to attach restrictions to discounted prices so that higher prices (with fewer restrictions) seem fair by comparison. Restrictions mayinclude booking a certain length ahead of time, staying for a minimum length of time, staying over a particular night, having a change or cancellation penalty, and having a nonrefundable reservation. If restrictions are tied to different prices, customers may view the transaction differently and may view the different prices as fair. In my opinion the second option looks really fair the one toattach services in an increases price, that seems fair to me.
* Restrictions and benefits
The hoteliers have to be careful in this because if they give a discount with certain restrictions the customer will accept that but if the restrictions go too far this will be unfair for customers so I´m agree customers have to feel agree with the restrictions.
* The survey and role information
Leer documento completo
Regístrate para leer el documento completo.