Finding the right hotel pricing strategy can be challenging for newcomers in the hospitality business. Furthermore, without proper training in revenue management, failure to implement effective tactics can mean the difference between struggling month after month and achieving profitability.
However, do not worry. Below are three simple ways for you to discover the most suitable hotel pricing strategy.
Research and Match your Competitors
Before starting your hotel business, you most likely researched your competitors’ pricing, which is not an unethical practice. Setting aside your ego, this is what distinguishes a smart revenue manager from the rest.
Matching your competitors’ prices is a common strategy used by many hoteliers. However, if you choose to do so, you should offer your guests better value for the same amount of money.
Here is how it usually works:
Let us take booking.com for example:
When people, including us, travel, they often look at several properties that offer price matching. The first thing that catches everyone’s attention is the pictures. High-quality images leave a good first impression, which can make a significant psychological impact.
The second thing people notice is the value for money. They want to get the best deal possible for the amount they are paying.
This hotel pricing strategy means that you should research and price match all of your competitors on the online travel agencies where you advertise. Additionally, offer one or two extra free services compared to your competitors.
Even if you beat only a few competitors with this approach, you will still be ahead. Trust me; you can implement this strategy without sacrificing your budget. For instance, offer free services like ironing, washing, room service, or a newspaper.
All of these services are tasks that your staff is already doing, and it would only require several extra minutes of their paid time.
Go above the competition
Before raising the prices of your property, you should always test if it can work. However, to increase your chances of success, try the following tip below.
Ensure that your property has amazing pictures that can sell the dream. Hire a professional photographer to make them look as good as the ones in magazines.
You will notice that big hotel brands use this strategy extensively. They showcase stunning pictures of their food, bed setup, amenities, or unique and dreamy views of their property. Every hotel has something unique to offer, which can be showcased through appealing pictures
In fact, Tripadvisor was once punked by an amazing strategy when a fake restaurant ranked number 1. This was mostly due to the dreamy pictures of the food, which were not actual food pictures!
The bottom line is that you should not resort to unethical methods to gain attention. You can showcase the uniqueness and value of your hotel and position it as elite accommodation through the right pricing strategy that outshines your competitors.
Test and implement this Hotel pricing strategy with lower rates
This doesn’t mean you should lower the prices of all your rooms. Instead, you should test this strategy with a few rooms.
The best part?
When someone searches for properties on Google or online travel agencies in your area, they will see something like this: “Pricing starts as low as $20 for one night in New York” for the select few rooms you’ve chosen to apply the strategy.
The goal here is to get more clicks to your property and then convert those potential visitors with bonus amenities and beautifully-made pictures!
Also, you could use these 10 tips for positive Hotel reviews, which ultimately leads to more revenue
Track all of the goals without damaging the budget.
Your goal as a hotel revenue manager is simple: track what works and what doesn’t work.
Even if you have only a few rooms and little expertise in revenue management, you should test these hotel pricing strategies to stay ahead of your competition.
Don’t forget to always research before you test something.
Survey and appreciate your guests.
I hope that for you, just one hotel pricing strategy can bring in some extra revenue.