RESEARCH ARTICLE Istanbul Business Research Istanbul Business Research, 50(1), 47-76 DOI: 10.26650/ibr.2021.51.0073 htp://ibr.istanbul.edu.tr/ htp://dergipark.gov.tr/ibr Submited: 27.04.2020 Revision Requested: 14.06.2020 Last Revision Received: 05.11.2020 Accepted: 15.11.2020 Published Online: 31.05.2021 Price Sensitvity Measurement: A Yield Management Approach* Okan Çolak 1 , Levent Koşan 2 Abstract The purpose of this paper is to investgate and identfy the potental revenue losses, at price points determined by price sensitvity measurement, between actual revenue and potental revenue that can be gained, in terms of yield management. A case study was carried out in a 5 star hotel business in Aydın, Turkey. In the study, a questonnaire was conducted to determine price resistance levels, price threshold limits, price sensitvity levels and price perceptons based on the room quality perceptons of the tourists visitng the hotel business. Also, an interview was performed with the accountng manager and the front ofce manager about the room prices determined. Hotel businesses can determine the optmal price by depending on the quality and value percepton of the customers; thus they can use their limited capacity more efciently so that they can maximize yield. This study showed that the hotel business lost room revenue at all points calculated. The hotel business sufered a potental loss of 35-40% because of the high occupancy rate in July and August. The hotel industry could have room sales revenues much more than the actual room sales revenues, especially if the agency commission expenses can be reduced. Keywords Yield management, Price Sensitvity Measurement, Willingness-to-pay, All Inclusive System, Hotel Management * This artcle is derived from a Ph.D. thesis enttled “Integraton of Price Sensitvity Measurement and Quality Cost Management into the Target Costng Process in All-Inclusive System: An Applicaton in a Hotel Enterprise” 1 Corresponding Author: Okan Çolak (Asst. Prof. Dr.), Harran University, School of Tourism and Hotel Management, Recreaton Management Department, Sanliurfa, Turkey. E-mail: okancolak@harran.edu.tr ORCID: 0000-0001-7104-5853 2 Levent Koşan (Assoc. Prof. Dr.), Mersin University, Faculty of Tourism / Tourism Management, Mersin, Turkey. E-mail: lkosan@mersin.edu.tr ORCID: 0000-0001-7630-6354 To cite this artcle: Colak, O., & Kosan, L. (2021). Price Sensitvity Measurement: A Yield Management Approach. Istanbul Business Research. Advance online publicaton. htp://doi.org/10.26650/ibr.2021.51.0073 This work is licensed under Creatve Commons Atributon-NonCommercial 4.0 Internatonal License Introduction Customers decide to buy according to their thoughts about perceived value and what the current price should be rather than the price stated by the businesses (Kotler and Keller, 2012). Moreover, the price is a criterion indicating the potential customers’ “willingness to pay” for a product/service. Also, the price sensitivity of tourists is high, especially in hotel businesses. Therefore, customers’ willingness to pay and price sensitivities must be taken into account when making a pricing decision (Ayık et al., 2013; SMS, 2008). Since businesses do not have precise information about the market price, and the price will not be determined by