Pricing significantly impacts any consumer business, but it is essential for companies operating in fiercely competitive sectors like the hotel and travel sectors. The strain is constantly on to get room rates correct in the case of hotels because rivals maybe just next door. This puts pressure from both a revenue and guest perspective.
If your business is to prosper, you must constantly focus on giving customers value for their money while trying to keep your bottom line consistent and prevent being undercut by rivals (or undercutting yourself). It will probably fail if a strong foundation of planning and strategy isn’t used to drive hotel pricing. Maintaining an ideal hotel pricing strategy requires real-time data collection and close attention to the market and internal business changes.
Recognizing the hotel’s room rates
Pricing for rooms and revenue management has a very high potential for complexity. It may appear overwhelming if you aren’t qualified for revenue management. It could be challenging to resist the urge to stick with your current, straightforward room cost. It can be quite challenging to feel like you’re covering all the bases and keeping an eye on your pricing. The skills needed frequently span a number of academic fields, including technology, customer service, finance, and more.
Pricing your hotel rooms aims to maximize revenue from each room. Instead of focusing on the room’s value, consider how much you can get out of it. As the world becomes increasingly globalized, people are increasingly looking for ways to escape the hustle and bustle of their everyday lives.
One way to do this is by staying in a good hotel, like Ritz Carlton Amelia Island, in Florida. Good hotels offer their guests various services to help them relax and unwind.
The base of pricing criteria
Each hotel has its own distinct room pricing criteria based on the following:
Location & Room Size
Guests anticipate paying more for a room if it is more extensive and located in a more excellent hotel area.
Day of the Week
Weekday prices are sometimes lower because people stay at hotels on weekdays. Therefore, offering a lower charge on the weekdays increases business on the nights of Sunday through Thursday. Because there is more room demand over the weekends and holidays, rates are frequently higher.
A high season, a low season, and a shoulder season. The interval between the low and high seasons is known as the shoulder season. Many hotels have high and low seasons, while others keep things straightforward by charging the same amount for each room throughout the year.
Rates usually are at their highest during peak travel times, when more visitors are traveling. Then comes shoulder season, and finally, low season, when you advertise your lowest rates to draw visitors. There are no defined guidelines when choosing the dates that correspond to your seasons.
What meals will you be providing? Will you be offering just breakfast, half-board, or a full-board service? Differences exist even amongst them.
For instance, a full breakfast justifies paying more than a basic continental breakfast. You might charge less for accommodations that don’t include meals since some visitors might not care about the complimentary breakfast.
Provided room facilities
Upscale amenities like jacuzzies, fireplaces, balconies with ocean views, and king-sized mattresses are typically more expensive than those without them.
Many lodging establishments provide discounts for extended stays, and larger chains may do the same for group reservations. Rates are frequently more expensive during times of significant events, such as festivals, concerts, graduation ceremonies, and so forth.
Although this is a personal preference, hotels see the recurring business occasionally and decide against raising their rates for that clientele.
Developing a pricing strategy for hotels
You must do more than set rates for your rooms during specific seasons to develop and carry out your hotel pricing plan. To maximize the money, you make per room and visitor, you’ll want to go beyond that and optimize your pricing plan.
Technology can also be quite helpful in developing pricing plans for your hotel that are precise and efficient. You may much more easily keep an eye on the market, track competitors, gather data, forecast, and make quick adjustments with the help of pricing and business intelligence tools.