The following article explains the concept of Yielding Tags in RoomPriceGenie and how it can be effectively used.
The “Yielding Tags” function
Yielding tags make prices more dynamic by assessing demand for a specific room category and adjusting prices accordingly.
By creating a tagging system, you can group rooms with similar category, features, amenities and prices. This way, you can set up groups of rooms that are likely to behave similarly as they are attractive to the same guest profile. These groups can adjust their prices based on demand in relation to other groups.
Important notice:
Currently, only different room types can be assigned yielding tags. It is not yet possible to control rates (rate plans).
Management of yielding tags for individual room types
Typically, for example, you can combine all double rooms into one group, single rooms into another, and family rooms into a third group. These groups appeal to different target customers.
Alternatively, you could create groups based on certain characteristics, such as rooms with balconies versus rooms without balconies, air-conditioned rooms versus non-air-conditioned rooms, or rooms with sea views versus rooms without sea views. Demand for these room types fluctuates throughout the year, which means that your prices will be adjusted accordingly - possibly more expensive or cheaper than a reference room type.
It is recommended in most cases to group rooms based on their price, as this is often the deciding factor for guests when booking a room. For example, a single traveler would be willing to stay in a larger room if the price is the same as a single room, but would decide otherwise if there is a significant price difference.
RoomPriceGenie estimates the demand for each category by comparing the total number of rooms in each group with the number of rooms sold in that group.
Example:
Assume that single rooms are normally 30% cheaper than double rooms. You want to create two yielding tags:
- One group for all double rooms
- One group for all single rooms
*Note: Alternatively, you can also use the yielding tag for just one group if only one room type requires a dynamic price adjustment.
⚠️ Important note:
When applying yielding tags, especially for both categories, please note: If one group increases while the other decreases, the price difference between the categories may decrease and possibly overlap. This should be avoided so that the cheaper category (single room) does not become more expensive than the more expensive category (double room).
Further information can be found in the section “Setting up yielding tags > Minimum and maximum adjustments”.
What does the above example mean?
Example: The price difference between double and single rooms is -30%.
Scenario 1:
Single rooms sell much faster than double rooms. The system recognizes this trend and increases the price of single rooms by 10%. At the same time, double rooms do not sell as well, so their price falls by 10%. If the standard price for double rooms (without adjustment) is €100, this results in the following prices:
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- Double room: 100 € - 10 % = 90 € (recommended price with yielding day)
- Single room: standard price is 30 % lower than double room: 70 € + 10 % = 77 € (recommended price with yielding day)
The price difference between double and single rooms has shifted from -30 % (€ 100 vs. € 70) to -14 % (€ 90 vs. € 77).
Scenario 2:
Double rooms are booked faster than single rooms. The system proposes a 10% increase in double room prices. At the same time, single rooms perform worse, so their price is reduced by 10 %. Based on a standard price of €100 for double rooms, the result is as follows:
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- Double room: 100 € + 10 % = 110 € (recommended price with yielding day)
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- Single room: standard price is 30 % lower than double room: 70 € - 10 % = 63 € (recommended price with yielding day)
The price difference between double and single rooms has changed from -30 % (€ 100 vs. € 70) to -43 % (€ 110 vs. € 63).
Setting up yielding tags
Yielding tags do not have to be applied to all room types. You can only use them for categories where demand fluctuates and more flexible pricing is required. While it may make sense to apply yielding tags to all room types, the key is to group rooms in similar price categories that attract similar guests.
Example: It would probably not make sense to group standard rooms and suites if there is a significant price difference, as the demand trends for one category may not necessarily apply to the other.
Setting up yielding tags: minimum and maximum adjustments
These settings define the range within which price changes may be made. For example, if the minimum adjustment is “-10%” and the maximum adjustment is “+10%”, a standard price of €100 could be adjusted to a range between €90 and €110.
Notice:
If the price for a room is already low due to the standard price derivation, you should not set a low minimum adjustment, but instead allow an increase if demand is high. Remember that adjustments can be asymmetrical.
It is also important to consider the price derivation between different room categories.
When setting the maximum adjustment margin, you should anticipate scenarios and avoid, for example, single rooms becoming more expensive than double rooms. If you are worried about prices overlapping, remember that if one category is reduced by 10% and another is increased by 10%, the initial price difference should be at least 25% to avoid overlap, as can easily be seen in this example:
- Suppose the standard recommended price for room A is €100 and room B has a derivative of +25%, so its recommended price is €125.
If we apply a +10% yield adjustment to Room A and a -10% adjustment to Room B, the prices would be as follows:
- Room A: 100 Euro + 10% = 110 Euro
- Room B: 125 € - 10% = 112,50
If the price difference is less than 25% or the adjustments exceed ±10%, the cheaper room (Room A) could have a higher price than the more expensive room (Room B), depending on demand. It is important to take this into account when applying yielding tags to avoid unintended price overlaps.
Setting up yielding tags: Aggressiveness
The aggressiveness determines how quickly the adjustments move towards the maximum or minimum limits. Selecting high aggressiveness means that prices will adjust quickly to the maximum or minimum limit if there is a significant booking imbalance between room types. In contrast, low aggressiveness leads to gradual price adjustments based on the same factors..
Use cases - Multiple yielding tags for the same room type:
When multiple yield signs are applied to a single room type, the signs combine and increase the total adjustment through the yield signs.
Case 1: Subdivision of rooms according to different characteristics
Take room types A, B, C and D, for example:
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- Room types A and B are designed for 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, but 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
- Not air-conditioned
You can then assign the tags as follows: A (double room & air-conditioned), B (double room & not air-conditioned), C (family room & air-conditioned), and D (family room & not air-conditioned).
Case 2: Rooms with different views within the standard categories
This allows you to differentiate further, for example by labeling room types with specific views in addition to their regular categories.
Case 3: Increased adaptations for rooms with high discharge
For rooms with a very high derivation from the reference room type (e.g. a private dorm room in a dorm compared to a bed in a shared dorm), you can replicate yield tags to create larger adjustments. Since the default min/max adjustment for yield tags is ±25%, this strategy is useful for rooms with significant price differences.
Case 4: Management of multiple locations in one account
When setting up a RoomPriceGenie (RPG) account for multiple properties, overlapping yielding tags can help optimize pricing across multiple locations.
The following example shows a combined yield tag “Test” applied to different room types. If you select individual dates in the calendar, you can observe the effects of the pricing strategy.
We are currently in the process of updating our knowledge database to the new user interface. Thank you for your understanding if you still see an outdated display. However, the step-by-step instructions remain the same.