An opportunity assessment is essentially a strategy for an area within your product — as opposed to the product strategy, which lays out bigger themes that you will work on over time. This document came out of our hotel product strategy, which contains three pillars: integrations, revenue acceleration, and hotel empowerment. Yield management is a component of revenue acceleration.

The whole travel industry already does this — think about surge pricing with Uber, or how much more expensive a hotel room is on 4th of July weekend in San Diego. It’s about optimizing revenue by demand and supply. We believe there is an opportunity to pursue, both in introducing yield management to day-use guests and automating it to reduce the work for hotels. We knew this would be a multi-step journey that would likely span many quarters. This document was meant to lay out the details of the opportunity at a high enough level for us to talk about where it might go and how we might get there.

This document was a collaboration between me and the PM who owns the hotel area. I framed the template and laid out everything we needed to know, then she investigated and created the v1. It was a circular process to get to where it is today. At a larger company with more layers, this might be a director of product, but for now, it's just me.

This is an example of how this could work, not a source of truth for what's going to ship. We've made some adjustments since creating this doc.

We had 2 goals with this doc: (1) we wanted a place to start housing our thinking around this overall problem area, and (2) we wanted to open this up to more of the company to get feedback. Historically, ResortPass wasn’t very good at thinking past the first version of something. And so this sets out the approach we might take over time and what that first version looks like. It also connects the customer problem to business value, another thing I've been pushing on at ResortPass. This document lays out what problem we’re solving for hotels and what the upside is for us.


Another way to think about this is the "crawl, walk, run" plan. So what we're building right now is the very first step: the idea of hotels setting basic pricing rules. Within that, there's a product brief, user testing, prototypes, etc. When we're done with that, we'll likely move on to these other areas, which are further deepening the like commitment to yield management. It's like the housing within which all of these individual features can be contained.


One of the ways we've assessed this is talking to hotels to gauge level of adoption. We know hotels are leaving money on the table because we know how much inventory is sold out. Ideally, there's a standalone model for this; we will probably have it after v1, which we're trying to get out quickly. We may roll it back if it doesn't meet what we need.


Adam Fishman

See how my team assessed a major new product opportunity for ResortPass. In this doc, we lay out the details at a high enough level to get feedback and discuss how we'll get where we want to go.

Opportunity Assessment: Automated Yield Management

Yield Management is the process of making frequent adjustments in the price of a product in response to certain market factors, such as demand or competition. In the realm of ResortPass, this means changing the price of products due to changes in inventory or time in order to maximize revenue. This could mean increasing the price as inventory is sold because the remaining few are now at a premium. Or it could mean lowering the price if it is close to the inventory date and the hotel would rather get some revenue than have the inventory unused.

How is yield management done in ResortPass today?

Hotels can change the price of a product one day at time or for a specific date range and specific days of the week in that range. The onus is on the hotel to make the price change, as well as figure out what price to change the product to and when. Hotels report having to pay attention to ResortPass daily and throughout the day, making frequent price changes. While this is currently time consuming, they do it because they can see the revenue lift from their efforts.

We have a Boost Revenue feature that lets a hotel know when they should increase inventory, or lower prices. This logic looks 10 days out and shows a blue dot on the calendar day if the inventory is almost sold out (add inventory), or sales are low (lower price). The message to the hotel is shown when they click into a day.

After talking to some hotels, they seem to rarely lower pricing and instead talk about increasing pricing as more units are sold. 

We also provide hotels with competitive pricing on day passes and cabanas.

What is the vision for automated yield management?

With today’s advancements in machine learning, there is a future where hotels simply have to specify their price and inventory constraints in ResortPass and our machine learning algorithms test and optimize the prices to maximize revenue.

ResortPass’ fully automated yield management will be unique because:

It factors in competitor pricing from our one-and-only day guest marketplace, in addition to hotel specific day and house guest demand.

It optimizes inventory between day and house guests, ensuring inventory is never left unused, a missed revenue opportunity.

Hotels will be provided with robust insights and reporting to see how ResortPass’ automated yield management is performing.

While attainable, this automated yield management vision will take a lot of investment and there is still a lot of value we can provide to hotels incrementally as we make our way to a fully automated future. In addition, feedback from hotels shows that they want some control. We expect that even if we have a fully automated machine learning yield management feature, hotels will want to start with something they can control and work up to full trust in our automated solution. See “What is our plan?” below for more details.

We have heard from hotels that our main competitors, Real Time Reservation and UrVenue, both have basic automated yield management through pricing threshold rules. This is the only feature gap that hotels mention when considering moving over to ResortPass.

Our sales team has heard that with these pricing thresholds, hotels can set an inventory amount sold, or a number of days from the inventory date, at which to change the price. The hotel is specifying the new price or a percentage up or down to be applied. Abby Oliver, one of our sales reps, confirmed that UrVenue has both inventory and time-based pricing rules.

Our understanding is that no competitor is providing machine learning yield management. Even if they get there, their feature won’t have access to our marketplace competitor pricing data–a valuable differentiator for us.

We will take a ladder up to our automated yield management moon, not a rocketship. 

This allows us to provide incremental value now. We will start with matching our competitors in a basic pricing threshold tool, then venture into A/B testing tools, and then machine learning.

The first step is allowing hotels to set inventory and time thresholds for applying a new price, all specified by the hotel. This will get us to yield management feature parity with Real Time Reservations and UrVenue. Within this step, we will take an incremental approach, potentially releasing new rules one at a time.

Allow hotels to specify an inventory amount sold and the associated new price

Allow hotels to specify a number of days until the inventory date and the associated new price

Allow hotels to specify more threshold points for a given product

Allow hotels to specify a percentage change in price and have ResortPass calculate the new resulting price

Allow hotels to specify when sold out day guest inventory warrants moving inventory over from house guests, and how much inventory to move

The exact release order and rule set is TBD based on additional discovery needed with hotels. As we empower hotels to accelerate their revenue with pricing rules, we should consider what actions we believe the hotel should take and how we can guide them to take those actions when using the tool. We will need to consider how the Boost Revenue feature plays into this feature.

Hotels will see faster results if they are able to test more than one pricing rule at a time. A/B testing will empower hotels to fine tune their pricing rules. Why would we invest in A/B testing tools if we are going to provide machine learning? Machine learning is a big investment–it takes time to build and train models. We should start our machine learning investment while we build out A/B testing tools in parallel. Additionally, there will likely be hotels that want to keep their control on pricing changes. We want to offer a tool set that empowers hotels to be in the driver’s seat.

The pinnacle of our automated yield management is machine learning. Hotels can let us know their lowest product prices and minimum house guest inventory and our models, based on our marketplace and whitelabel demand, will maximize revenue.

We are confident that dynamic pricing and inventory availability for day guests in the ResortPass marketplace will add a lot of value to hotels’ and ResortPass’ bottom line. We still need to explore whether machine learning will benefit the house guest white label experience. Our assumption is that we will want to have machine learning models for both marketplace and white label, but we will prioritize the marketplace models first.

Even with machine learning, hotels will likely want a degree of control. We will have to decide whether participation in the ResortPass marketplace requires participation in a certain degree of machine learning yield management. Alternatively, if we can prove that our machine learning algorithm is increasing revenue, we can monetize it as an advanced feature.

We are confident that each step in the plan towards fully automated yield management will increase GBV, hotel revenue, and ResortPass’ revenue. Our confidence comes from knowing that automated yield management already exists in the hotel industry and we see a lot of opportunity on ResortPass to sell more inventory and at higher price points.

It is hard to put an exact revenue increase around this opportunity because our category is so new.

 Competitors have not published anything sharing how their yield management works or the benefits that hotels have seen.

Automated yield management has come up in the sales process when talking to hotels using Real Time Reservation or UrVenue. Aside from a revenue increase, we expect the automated yield management to help with hotel acquisition and retention.

What is the key metric for this opportunity?

The key metric for this opportunity is GBV. We aim to see a significant increase in GBV for hotels using any version of our automated yield management, as well as an overall GBV increase for ResortPass.

Low adoption due to complexity and lack of trust

The rule sets hotels are asking for are simple enough to talk through, but will be quite complex once you put them all together, and over time periods where there are default rules and rule overrides. We need to create a Partner Portal experience that is easy to understand throughout the process of rule creation, viewing what rules are currently in place, and making changes to the rules. Otherwise we risk low adoption. Prototype testing is going to be very important for this feature.

Once it comes to automation where ResortPass is determining what price to apply and when, we need to provide helpful visibility and insights to hotels in order to win their trust. If hotels do not trust our decision making or can’t see what we are doing, they will not adopt the feature.

Automated yield management comes with complex functionality. We need to be mindful of how large a release is. We don’t want to take too long to deliver value to hotels. This puts us at risk of lower hotel acquisition and retention, as well as missed revenue. This is why we need to take a ladder approach to the moon instead of a rocketship. Smaller releases where hotels can start seeing a benefit as soon as possible. We do need to be careful about not creating releases that are two small, where hotels feel like they have to keep learning new parts of the feature. For example, with the hotel defined rules in the first phase, we may want to package what we determine to be foundational rules together, creating a better MVP.

Opportunity Assessment: Automated Yield Management at ResortPass

Opportunity Assessment: Automated Yield Management

What is Yield Management?

How is yield management done in ResortPass today?

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