The following article explains the concept of Yielding Tags in RoomPriceGenie and how it can be effectively used.
The 'Yielding Tags' Feature
Yielding tags make prices more dynamic by assessing the demand for a particular room category and adjusting the price accordingly.
By creating a tagging system, you can group rooms with similar types, facilities, amenities, and prices. This allows you to set up groups of rooms that are likely to behave similarly because they appeal to the same customer profile. These groups can then adjust their prices relative to other groups based on demand.
There's one important distinction to keep in mind: currently, you can only yield different room types. Rate plans yielding tags are not available yet.
Managing Individual room type yielding
Typically, this means you might group all your Double Rooms into one group, Single Rooms into another, and Family Rooms into a third. These sets cater to different target clients.
However, you could also create groups based on specific features, such as rooms with a balcony versus those without, air-conditioned rooms versus non-air-conditioned rooms, and sea-view rooms versus non-sea-view rooms. The demand for these room types fluctuates throughout the year and will be priced accordingly—potentially being more or less expensive than a reference room type. In most cases, it’s recommended to group rooms based on their price, as this is often the primary factor when clients decide which room to book. For instance, an individual traveler may be willing to stay in a larger room if its price is the same as a single room but might choose otherwise if there’s a significant price difference.
RoomPriceGenie estimates demand for each category by comparing the total number of rooms in each group with the number of rooms sold in that group.
With the above in mind, let’s consider the following example:
Suppose the Single Rooms are typically priced 30% lower than your Double Rooms. You want to create two yielding tags for:
- A group of all your double rooms
- A group of all of your single rooms
Alternatively, you can apply the yield tag to just one group if only one room type requires dynamic price adjustment.
❗ IMPORTANT NOTE
When applying yield tags, especially to both categories, remember that if one increases while the other decreases, the 30% price difference may narrow, causing the prices to converge and potentially overlap.
This is something you might want to avoid at all costs to ensure that the cheaper category (Single Rooms) does not become more expensive than the more expensive one (Double Rooms).
For more details, continue reading the section ‘Setting Up Yielding Tags > Minimum and Maximum Adjustments.’
What does the above example mean?
Consider this:
Double and Single Rooms' price difference is -30%.
Scenario 1:
Single rooms are selling much faster than double rooms. The system detects this trend and increases the price of single rooms by 10%. Meanwhile, double rooms are not selling as well as single rooms, so the system decreases their price by 10%. Assuming the standard price recommendation for double rooms (without any adjustments) is €100, here’s how the prices adjust:
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- Double Rooms: €100 - 10% = €90, recommended price with yield tag applied
- Single Rooms: Standard price is 30% lower than Double Rooms, so €70 + 10% yield tag adjustment = €77, recommended price with yield tag applied
In this example, the price difference between Double and Single Rooms has shifted from the standard -30% (from €100 vs. €70) to -14% (from €90 vs. €77) due to the yield tags.
Scenario 2:
Double Rooms are being booked at a higher rate than Single Rooms. The system suggests increasing Double Room prices by +10%. Conversely, Single Rooms are underperforming, so their price decreases by -10%. Again, starting from a standard price of €100 for Double Rooms, here’s the outcome:
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- Double Rooms: €100 + 10% = €110, recommended price with yield tag applied
- Single Rooms: Standard price is 30% lower than Double Rooms, so €70 - 10% yield tag adjustment = €63, recommended price with yield tag applied
In this scenario, the price difference between Double and Single Rooms has changed from -30% (from €100 vs. €70) to -43% (from €110 vs. €63) due to the yield tags.
Setting up Yielding Tags
Yielding tags don’t need to be applied to all room categories. You can choose to apply them only to categories with fluctuating demand where you want more pricing flexibility. While applying a yielding tag to every room category is perfectly fine, the key is to group rooms within a similar price range that are likely to attract similar types of clients.
For example, it probably wouldn’t make sense to group standard rooms and suites if there is a significant price difference between them, as demand trends for one category may not apply to the other.
Setting up Yielding Tags: Minimum and Maximum Adjustments
These settings determine the range within which price adjustments are allowed. For example, if the minimum adjustment is ‘-10%’ and the maximum adjustment is ‘+10%’, starting from a standard price of $100, the adjusted price could range between $90 and $110.
NOTE:
If a room is already priced low due to the standard price derivation, you may prefer not to set a low minimum adjustment but, instead, allow for increases if there’s high demand. Keep in mind that adjustments can be asymmetrical.
It’s also essential to consider the price derivation between different room categories.
When setting the maximum adjustment range, you might want to preempt and avoid scenarios where, for example, Single Rooms could become more expensive than Double Rooms. If you’re concerned about prices crossing over, remember that if one category decreases by 10% and another increases by 10%, the initial price difference should be at least 25% to prevent overlap.
It's easy to see with this example:
- Suppose Room A’s standard price recommendation is €100, and Room B has a derivation of +25%, making its recommended price €125.
If we apply a +10% Yield Tag adjustment to Room A and a -10% adjustment to Room B, the prices would be:
- Room A: €100 + 10% = €110
- Room B: €125 - 10% = €112.50
If the price difference was less than 25%, or if the adjustments exceeded ±10%, the less expensive room (Room A) could end up priced higher than the more expensive room (Room B), depending on demand. It’s crucial to consider this when applying Yield Tags to avoid unintentional price overlaps.
Aggressiveness determines how quickly adjustments move toward the maximum or minimum limits. Selecting a High aggressiveness means that prices will adjust rapidly to the maximum or minimum if there is a significant booking imbalance between room types. Conversely, choosing Low will result in gradual price adjustments based on the same factors.
USE CASES - APPLYING MULTIPLE YIELD TAGS TO THE SAME ROOM TYPE:
When multiple yield tags are applied to a single room type, the tags compound, increasing the overall adjustment made by the yield tags.
Case 1: Dividing Rooms by Various Qualities
For example, consider room types A, B, C, and D:
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- Room types A and B have a maximum occupancy of 2 people.
- Room types C and D have a maximum occupancy of 4-6 people.
- Rooms A and C are equipped with air conditioning, while rooms B and D are not.
In this scenario, you can create the following four tags:
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- Double Room
- Family Room
- Air-conditioned
- Non-air-conditioned
You can then assign tags as follows: A (Double Room & Air-conditioned), B (Double Room & Non-air-conditioned), C (Family Room & Air-conditioned), and D (Family Room & Non-air-conditioned).
Case 2: Rooms with Different Views Within Standard Categories
This allows you to differentiate further, such as by tagging room types with specific views in addition to their regular categories.
Case 3: Amplifying Adjustments for Rooms with High Derivation
For rooms with a very high derivation from the reference room type (e.g., a privatized dormitory in a hostel versus a bed in a shared dormitory), you can replicate Yield Tags to create larger adjustments. Since the standard min/max adjustment for Yield Tags is ±25%, this strategy is useful for rooms with substantial price differences.
Case 4: Managing Multiple Properties Within a Single Account
When setting up one RoomPriceGenie (RPG) account for multiple properties, overlapping yield tags can help optimize pricing across different locations.
The example below demonstrates a combined yield tag, "Test," applied to different room types. By selecting individual dates on the calendar, you can observe the effects of the pricing strategy.
We are currently in the process of updating our knowledge base to the new UI. Thank you for your understanding in case you still see an outdated display. Nonetheless, the step-by-step guide will remain the same.