Crafting and executing your pricing strategy requires you to do more than establish rates for your rooms during particular seasons. You’ll want to go beyond that – optimising your pricing strategy so that you maximise the revenue that you generate per room and per guest.
With the increased availability of real-time marketing data, it’s entirely possible to design a multi-tiered dynamic pricing strategy that can change at a moment’s notice.
Here are 5 questions you should be asking yourself about your hotel’s pricing strategy:
1. Are we actively monitoring our competitors’ rates?
First and foremost, as a revenue manager, you should always know the rates that are being offered at competing hotels in your local area.
This allows you to make the right decisions when it comes to pricing your rooms to attract more travellers to your property.
You can value match your competitors by pricing your rooms at the same rate as your competitors, or even slightly higher.
In the event of high demand, this gives you the competitive edge while also allowing you to earn additional revenue.
2. Are we running local promotions to increase occupancy?
Monitoring events and activities in the local area can help you design promotions that attract travellers.
For instance, if a festival is planned for your community and you know that hotel rooms will sell out, create a promotion in advance that offers guests the lowest rate in town.
This allows you to sell your rooms out as quickly as possible, because you have the best price in town.
Once you have your guests booked, focus on selling them extras that allow you to increase your revenue per room.
3. Are we analysing current market conditions in real-time?
The revenue manager should be responsible for evaluating real-time data on a regular basis — sometimes multiple times per day — to evaluate the immediate pricing strategy.
Room rates can be changed hourly if necessary, particularly if there’s an unexpected spike in demand.
4. Are we increasing bookings during traditionally slow periods?
If you are located in a summer travel destination, then you know that the off-season can be a slow time at your hotel.
Design a pricing strategy that encourages people to book your hotel when they might not typically think of travelling.
5. Are we prioritising last-minute sales of available rooms?
All of the statistics and studies are showing the same results right now – mobile bookings are on the rise, and they will only continue to increase. It’s important to note that most mobile bookings happen more frequently at the last minute.
Use a channel manager to connect your booking engine with the most powerful distribution channels in the industry. This allows you to broadcast your last-minute availability to your connected online channels and sell out your final remaining rooms to travellers who are taking a spontaneous trip.
Investing in hotel technology that allows you to make seamless adjustments to your hotel’s pricing strategy is critical. It’s crucial that you have a pricing intelligence tool like Prophet to help drive your strategy, and a channel manager like SiteMinder’s Channel Manager to execute that strategy quickly.