yield pricing

Yield pricing or yield management is a dynamic instrument for price and capacity control.

Yield management is a special form of price differentiation over time, which is used primarily for capital-intensive services such as the hotel or airline industry. The aim of yield management is to maximise the use of available and fixed capacities. Since variable costs are low in the industries mentioned above, the focus is on minimizing marginal costs.

Prices are determined according to the time of use and available capacities. For example, higher-priced services are offered to price-insensitive customers such as business travelers, while price-sensitive families are offered cheaper services for their holidays. In order to effectively conduct the capacity optimization of yield management, a database is required that can be used for the forecast development of demand.