Aldemar Hotel and Spa [Operations Management Case Study] Essay

Aldemar Hotel and Spa [Operations Management Case Study] - Essay Example Yield management has become particularly important in the travel and hospitality industry. This is primarily because the resources such as airline tickets and available rooms in a hotel are fixed and cannot be increased or decreased to manage the demand of the consumers at different periods of time (Barnes, 2008). This is also the main reason that yield management is so important for Aldemar. It allows the owner to manage the hotel’s limited resources which includes its rooms in the best possible manner. The managers at Aldemar cannot increase or decrease its room capacity to facilitate the demand of the customers. When there is increased demand of the rooms during holiday season, the management risks losing its important and loyal customers when the rooms are already booked and they cannot overbook due to its long-term impact of the customers’ perception and the hotel’s reputation. Similarly during low demand of the rooms, Aldemar faces issues of decreased reven ues and increased costs as rooms require maintenance and the organization has to pay for its overhead costs that remain more and less constant during all seasons. With the help of yield management, Aldemar can hope to move certain customers during the off-season thus keeping room occupancies more or less constant. What other approaches to capacity management could Aldemar use? There are other different approaches to capacity management that Aldemar can benefit from. One of them includes promotion. Aldemar Hotels can use promotion as a mode of attracting consumers during the off-peak season. They can offer rooms at discounted prices or could introduce new features during the off-peak season. They could use their online website to promote such offers. Another approach to capacity management is product development that falls under the category of demand management. Demand management includes managing price, promotion, reservations, and waiting etc. During the off-season, Aldemar Hotels can offer certain services and products that would attract a high number of customers. Aldemar can for example shift the opening and closing times of their hotels to accommodate their guests. They could allow guests to benefit from tour guides for discounted rates during off-peak season. Aldemar could particularly benefit from using its spa for product development. It could introduce new offers or products for consumers during the off-peak season. The third approach is to adjust the changeable resources in line with the demand of the organization. This is known as chase demand that involves sub-contracting, hiring part time labor, multi skilling and participation of the customers. For example, during peaks seasons, Aldemar can hire extra part-time labor to make up for the increased work load. They could add or share their equipment through partnership agreements. Furthermore, Aldemar can delegate extra work during off-season period such as renovations in the hotel rooms. Critically assess Aldemar’s current yield management practices (e.g. the organizational structures, procedures, performance monitoring). Even though yield management has come forward as one of the best approaches for managing capacity for the hospitality industry, many organizations fail to incorporate this management strategy in the best of manner. In this manner, they lose a