White Sky Hospitality http://whiteskyhospitality.com/wp-content/uploads/2015/02/logo_coming_soon.png White Sky Hospitality2016-07-07 06:23:222016-07-07 06:23:2210 best practices to better pricing for your hotel
Pricing is often complex and can baffle the best of hotel marketers. Here are some key elements of hotel pricing that can serve as best practices to guide your hotel’s pricing.
- Understanding the break-even point is important to creating a rate structure and strategy. So it is critical to understand the pricing point from where your room sale is actually profitable.
- Avoid ad-hoc pricing as much as possible. This can lead to price confusion and loss of price integrity in the market.
- Focus on niche segments which may provide longer stay durations. This helps drive higher revenues and better suited clients who enjoy yoru hotel and are more likely to leave positive reviews
- Work on increasing value rather than lowering prices. Reducing price is a slippery slope from which it is difficult to climb out of. Whether it is a corporate contract or if it is leisure travellers, it is alwalys better to include that little bit extra within the price. This is not only cost effective but also creates a better value proposition.
- Offer best available rates (BAR) to early bookers 3 to 12 months out. This allows you as a hotel to understand demand better and allows you to manage your sales and marketing efforts.
- Not many room types. We have seen hotels with 20-30 rooms having more than 4 room types. This is counter productive as it is hard to differentiate and harder to maintain inventory.
- You should always consider other objectives such as increasing your average stay, improving traditionally poor period, etc. Occupancy increase will come through as a secondary objective if your packages are well targeted.
- Review your bookings, availability and targets on daily basis to decide on price increases. Many of the smaller independent hotels do not like the idea of changing pricing regularly; however this is important to stimulate the right type of demand. Right technology is essential to support you in this process
- Use psychological pricing – avoid setting round figures – for example, INR 4900 instead of INR 5000. This is probably one of the oldest marketing tactics in the world, but it works.
- Consider your competitor pricing, but don’t let it direct the pricing for your hotel.