The Efficiency of Yield Management

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The efficiency of yield management techniques greatly depends on the skills of employees working in the hotels. Provided that these people lack expertise or motivation, it is rather unlikely that their organizations will be able to increase their profitability or maximize occupancy rate. Thus, business administrators should pay close attention to the HR practices that are supposed to enhance the performance of workers. The respondents, who were interviewed for this study, recognized the importance of HR practices. This is why one of these managers argued that front office employees were vital for the sustainability of a hotel. Moreover, business professionals attached much importance to the allocation of duties since this issue is vital for the good organizational performance of a hotel.

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The results of the interview indicate that many professionals focus on the empowerment of workers. The interviewees regarded empowerment as the ability of employees to take initiatives to address workplace issues. In their opinion, they should have an opportunity to set different prices depending upon customers’ willingness or ability to pay. For example, some business administrators let frontline workers raise or decrease the price per room by 25 percent. This is one of the most widespread practices. This initiative is supported by scholars who examine the benefits of empowerment (Mohsin & Kumar, 2010, p. 40). From their standpoint, this strategy can help hotels better retain clients and maximize revenues (Mohsin & Kumar, 2010, p. 40). However, hoteliers note empowerment can be beneficial if the employees are knowledgeable in various aspects of yield management such as the segmentation of clients or pricing strategy. Still, these respondents have a positive attitude toward the initiatives of workers.

Nevertheless, this policy is not supported by every professional that was interviewed in the course of the study. Some of the respondents did not enable workers to set prices independently. These people had to ask the permission of the managers if they had to lower the price for a room. However, the analysis of findings suggests that this approach is not extremely widespread among Saudi hotels. One should remember that such a policy can lead to some adverse consequences such as the failure of workers to meet the demands of clients. The problem is that even the most competent manager cannot cope with every workplace task. This professional has to delegate some of his/her authority to ensure the good performance of the organization and its sustainability. Therefore, a lack of empowerment can result in potential conflicts with clients and the failure to increase revenues (Baum, 2006). This is one of the dangers that business administrators should be aware of.

One of the ideas that managers emphasized during the interview was the importance of providing training to frontline employees whose competence is critical for the sustainability of a hotel. For instance, the business administrators argued that front officers had to understand the principles of yield management and various applications of this technique. This is why some of the hotels organized courses for the workers. Additionally, these organizations hired consultants who showed how one could use various software applications related to revenue management. Thus, training was important for the majority of hotels that were studied. It should be noted that this policy is also supported by researchers. In their view, the investment into training can significantly benefit hospitality institutions that should meet the requirements of both individual and corporate clients (Kimes, 2008). As it has been said before, the policy of empowerment can be possible only in those cases when an individual has in-depth expertise in different aspects of the hospitality industry. This is one of the main arguments that scholars put forward. Business administrators should pay close attention to the development of courses that can assist employees in developing relevant skills (Lockyer, 2007). These are the main recommendations that can be derived from academic literature. Therefore, one can argue that the responses of hotel managers are in line with the opinions expressed by researchers and their strategies are quite justified. This is one of the key points that should be considered.

Another important issue identified by hotel managers is the satisfaction of frontline workers. This element is critical for the excellent performance of these people and good relations with customers. Additionally, the respondents stressed the connection existing between employees’ satisfaction and their motivation. The interviewees believed that frontline workers could cope with their duties effectively if they felt that their contribution had been valued by senior management. This condition is important for their loyalty to an organization, self-esteem, and long-term performance. It should be noted that these professionals relied on monetary and non-monetary rewards to compensate employees for their contributions. For example, one can speak about financial bonuses or promotions that were supposed to increase workers’ commitment to organizational goals. In some cases, these bonuses were based on the financial performance of a hotel during a certain period, such as three months. This approach is supposed to enhance the willingness of personnel to improve their work, especially if one is speaking about relations with clients. Overall, one can argue that employees’ satisfaction and motivation are of great priority for hoteliers interviewed during this research.

One can also note that this strategy is advocated by scholars who examine the relations between employee satisfaction and organizational performance (Tesone, 2012). In particular, they argue that an individual, who is unsatisfied with his/her work, is unlikely to take initiatives that meet the needs of clients. This person will have practically no incentive to improve his/her performance (Tesone, 2012). Apart from that, researchers note that the lack of satisfaction leads to high turnover rates within an organization. This means that employees will come and go very often; as a result, the hotel will not be able to train the personnel or help them develop their professional skills. This is another point that should be taken into account by business administrators. Thus, hoteliers should remember the incentive programs that motivate workers to increase the profitability of a hotel. Therefore, many of the practices identified during the interview are supported by academic literature.

This discussion shows that managers in Saudi hotels focus on such aspects as empowerment of employees, their development of their skills, and their satisfaction with their work. These strategies can be regarded as the prerequisites for good organizational performance of hotels, especially their ability to increase revenues. Apart from that, they are important for maintaining good relations with customers whose opinion on the quality of services is important for hoteliers. These are the main aspects hotel managers are keenly aware of. In most cases, their practices are consistent with the strategies advocated by scholars.

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Reference List

Baum, T. (2006). Human Resource Management for the Tourism, Hospitality And Leisure Industries: An International Perspective. London: Cengage Learning EMEA.

Kimes, S. (2008). Hotel Revenue Management: Today and Tomorrow. Ithaca: Cornell University.

Lockyer, T. (2007). The International Hotel Industry: Sustainable Management. New York: Routledge.

Mohsin, A., & Kumar, B. (2010). Empowerment Education and Practice in Luxury Hotels of New Delhi, India. Journal Of Hospitality & Tourism Education, 22(4), 43-50.

Tesone, D. (2012). Principles of Management for the Hospitality Industry. Boston: Routledge.

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