Explain the concept of yield management in F&B and give an example.

• A. Yield management uses demand-based pricing and inventory control to maximize revenue
• B. Yield management is fixed pricing
• C. Yield management applies only to reservations
• D. Yield management minimizes promotions

Answer: (A)

Yield management in F&B treats tables, seats, and dining time as perishable inventory and uses pricing and availability controls to maximize revenue. The idea is to forecast when demand will be high or low and steer guests toward the right times and price points, capturing more revenue per cover while keeping seats filled. A clear example is an restaurant that offers an early-bird option at a discounted price for the 5:30–6:30 pm slot to encourage guests to dine during slower hours, increasing table turnover. For the peak 7:00–9:00 pm seating, prices may be kept higher or limited to preserve demand, and add-ons like wine pairings or specialty menus can drive higher revenue per guest. This approach relies on demand-based pricing and careful management of table availability, rather than fixed pricing or simply avoiding promotions.