Glossary
Yield management
Yield management is selling a fixed, perishable fleet at the price that earns the most per car. How it works in car hire, with a worked example.
Yield management is setting prices and availability so a fixed number of cars earns the most it can, date by date. It works because a car day is perishable: a car parked today can't be rented yesterday.
Revenue management is the wider name for the same idea. It adds forecasting, fleet planning and channel decisions.
How it works
Three conditions make it pay: capacity that's hard to change quickly, demand that varies by date, and customers who book ahead at different prices. Car hire has all three.
The core move is protecting cars for later, higher-paying demand instead of selling them all early and cheap.
Worked example
Hypothetical. Say you have 10 compacts for a Saturday pick-up three weeks out. Early demand would take all 10 at NZ$90. From your booking curve, you expect about 6 late bookings at NZ$140.
| Plan | Revenue per day |
|---|---|
| Sell all 10 now at NZ$90 | NZ$900 |
| Sell 4 at NZ$90, hold 6 for NZ$140 | NZ$1,200 |
| Hold 6, only 3 late bookings show | NZ$780 |
Holding cars wins if your forecast is right and loses if it's wrong. That's why yield management lives or dies on demand forecasting.
Why it matters for a rental operator
Fleet is your biggest cost and you can't add cars for one weekend. Yield management is how you get more out of the cars you have. Done well it lifts revenue per unit, the number that pays the lease.
See it in Rate Pulse
The market rates by pick-up day show where competitors are holding price and where they're dropping it, for the next 14 days. Start at Rate Pulse. Tying that to your own bookings is what our revenue management work does.
Want this done on your own bookings?
Forecasting, rate management and booking-system integration, scoped to how you run.