Yield management and perceptions of fairness in the hotel business

For the last two decades “yield management” (also called “revenue management”) has been increasingly employed in the hospitality sector in order to improve the yield from hotel structures. What’s more, the focus is progressively more centred on the customer instead of the room inventory. However, up to now, little research has investigated the effects of these practices on the relationships between hotels and their clients. This paper firstly examines the nature and the various aspects of customer perceptions regarding yield management practices, focusing especially on perceptions of fairness. Secondly, the paper analyses the variety of actions that hotel companies may design and implement in order to properly anticipate, face and manage customer conflicts resulting from perceived unfairness due to the use of the revenue management levers. Finally, these managerial techniques adopted by the hotel companies are considered in the framework of a business ethics approach. (JEL: M19, M31) This article is based on a paper presented at the 9th “Toulon-Verona” Conference - Excellence in services, University of Paisley, Scotland, 7^th-8^th September 2006.