Rooms yield is a revenue management measure that compares the rooms revenue a hotel actually earned with the rooms revenue it could have earned if every available room had been sold at the rack rate (or the best available rate) for the same period. It is expressed as a percentage, so it shows how much of the hotel's room revenue potential was captured through occupancy and rate together. It is related to RevPAR, but RevPAR is an amount per available room, while rooms yield is a share of the maximum. Revenue managers use it in yield management to judge pricing, discounting and distribution decisions.
What is rooms yield?
Rooms yield is the percentage of a hotel's potential rooms revenue that it actually achieved in a given period. A rooms yield of 100% would mean every available room was sold at the full rack or best rate; a lower figure shows how much revenue was given up through empty rooms, discounts or lower-priced channels.
How is rooms yield calculated?
Rooms yield = actual rooms revenue / potential rooms revenue × 100, where potential rooms revenue = available room nights × rack rate (or best rate). Example: a 120-room hotel with a rack rate of €150 has a potential of 120 × €150 × 30 = €540,000 for a 30-night month. If it earns €378,000 in rooms revenue that month, its rooms yield is €378,000 / €540,000 × 100 = 70%.
