Poll: Is (automatic) yield management important?

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Thread: Yield management

  1. #1

    Default Yield management

    Hotels have been using yield management for a long time -- that is, changing prices dynamically based on demand. There has recently been some discussion about yield management in the campground industry also.

    Of course with Campground Master, you can already do this to a certain extent. You can have any number of rates based on dates, so you can automatically have higher rates in the summer, on weekends, and for busy holiday weekends, for instance. You can also have multiple rate groups that you can manually choose from, or if you're using auto-rates, that you can have applied based on things like Discount Used or a reservation "preference" selected when the reservation is made. And of course you can always make manual adjustments to the charges if needed, by adding a discount or surcharge. However these don't quite match what I consider dynamic yield management.

    I'm not an expert on the matter, but here are some of the yield management issues / scenarios as I see them. I would like some feedback on them -- what makes sense, what doesn't, and whether you would consider them for your business.

    1. Price going up as demand increases. That is, if a particular type of site is filling up fast, the ones remaining are at a higher price. This is usually done on a gradual basis, or using several tiers, changing as a function of availability and how far out the date is. For instance if the reservation is for 3 months from now and you're already almost full for that date, the price is higher than if it's for next week and you still have a few spots available.

    2. Price discounts to help fill spaces. This is in a way could be the same thing as #1, e.g. the price is lower when there are a lot left and higher when there are just a few left. But to ensure maximum occupancy, what if you turn it the other way around -- for instance if you still have sites open for next weekend, drop the price to entice people to fill the spaces? Naturally this only works on an "advertised" basis, e.g. if you show a "special rate" on your web site, and maybe only offer it if they reserve online or mention the discount when reserving.

    3. Upgrade discounts. If your economy spots are full but you have some deluxe spots still open, you might want to offer a "free upgrade" rather than have someone walk away, not wanting to pay for a deluxe space.

    4. Reel 'em in. In hotels, if you're at the counter asking about a room and don't bite at the first price they quote, you can often negotiate or just act undecided, and they'll start "finding" lower rates for you. This is especially common if there are other hotels nearby that you could go to. I don't know if this would work in a campground though -- even if you're in an area with a lot of competition, when they have their rig pulled up to your park office with no easy way to turn around, how likely are they to shop around?

    OK, so for our campground & RV park users -- is any of this an issue? My take on it is that most campgrounds are generally in a position that they need to be fair and friendly, and rely heavily on repeat customers. If you keep changing prices every time they stay, and campers start asking each other what they were charged, you may lose some happy campers. What do you think?

    For our non-campground users -- how useful would these kinds of features be? Any suggestions or other issues?

    Let us know!
    Stan Spielbusch
    [Forum Administrator]

  2. #2

    Default yield management

    I love the concept of yield management, but have not figured out how to make it work for my customers. Being a Good Sam park, one of our requirements is to post the rates. If you post them at the highest rack rate, then some people would read the sign and never come into the office to find out if there are lower rates. If you post a lower rate, then people would get upset about paying higher than posted. If anyone has any ideas on how to get around that issue, I'd love to hear it.
    Cheryl

  3. #3
    Join Date
    Jun 2008
    Location
    Grass Valley, CA
    Posts
    3

    Default Yield Management

    We are a fairground RV park, we operate year round as a normal rv park. During our major events when people are fighting for the sites they want we significantly raise the prices and require a minimum stay for all hookup sites! I started this 2 years ago, everyone at the administrative end of our fair was upset with me. Said it would never work, and that they would be the ones receiving the complaints. Well, It has been the best move we ever made. People are willing to pay the price to ensure they get what they really want. Those that don't want to pay the high prices pay a much reduced rate to dry camp and are not required to adhere to the minimum stay policy. The entire flow of these major events has improved dramatically. Prior to my arrival it was done on a first-come, first-served basis, so most of the people arriving paid for something they couldn't get when they arrived. They were NOT happy campers. Now, there a minimal complaints and Happy Campers!

  4. #4

    Default Rates

    Cheryl,

    When you post your rates...can you post a range for the various site levels? That way people can see there might be a lower price they could afford and might come in to check. Once inside, you have the opportunity to explain what sites are available at what prices.

    Most of the time, once they have the RV parked outside the door and have come into the office...they will stay. Those that are simply rate shopping generally do that by phone. At least that is the way things seem to run around our neck of the woods.

    We have one Good Sam Park in the area that ONLY posts a daily price with or without Good Sam discount...but gives you no idea of any of their other prices ..such as weekly or monthly or any other discounts they might give.

  5. #5

    Default thanks

    That is a great idea. I don't know why I did not think of it. I'll try that.
    Cheryl

  6. #6

    Thumbs up Rate Structure

    Hello All,

    We do NOT offer discounts anymore. We set our rates competitively, offer more services than our local competition. We do not "inflate" our rates so we can offer a particular group a discount.

    We do NOT honor Passport America (50% discount), We do NOT offer Good Sams discounts, we even eliminated our "group" rates.

    We instituted a higher rate for Holiday weekends (Mem. Day, 4th July and Labor Day, and one local event) 3 years ago. As we generally have to turn campers away on Holiday weekends, we also have a "minimum" stay. This works good for us as we are considered a "destination" campground. (We get very little road traffic)

    We have had very few complaints, mostly the "primitive" tent campers.

    Here is our reasoning... An empty site creates no problems. Why offer a discount and "de-value" your other sites. We also found that campers talk and the ones paying regular prices are upset that the people in the site next to them got a discount for the same type site.

    We find that camping clubs (most groups) pay for the campsites and do not participate in any of the activities, they do not buy anything from our camp store or concession. Most won't even buy firewood us. Then they want to use our rec room and pavilion for no additional cost.

    We still get camping clubs, and other groups so discounting hasn't had to be a priority.

    We have our holiday rates set up in Campground Master and it works great.

    FYI, our campground sites are broken up into 3 catagories:
    Overnight - All campers staying less than a month.
    Monthly Campers - Someone staying in their camper on a full-time basis.
    Seasonal - Lease (and maintain) their site for 1 year.

    We do not prorate campsites, their due date is the anniversary date of their arrival. Campground Master makes this an easy task, we are very active owners and know who is on the campground and when they are due.

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