Running an accommodation business is quite challenging. Somewhere in the hustle and bustle of taking proper care of guests and managing other hospitality tasks, hoteliers often overlook their pricing approach. However, you may leave money on the table and bottleneck your revenue growth prospects if you focus only on customer satisfaction and put zero effort into your pricing strategy.
Studies show that hoteliers can increase their profit with the same property by facilitating the right strategy and choosing the best room tariff. In today’s post, we will discuss the most effective tips you can implement to unlock your property’s revenue potential. Keep on reading if you want to grow your profit and outperform the competition.
#1 Leverage the Power of Dynamic Pricing and Maximize Your Revenue
Many hotels across the globe work on flat pricing strategy primarily because of its simplicity. They typically have one or two season rate charts that they keep rotating. This has become a common practice as it takes less time to modify compared to manual updates of hotel rates based on various seasons, demands, and other factors.
Flat pricing approach can be costly in today’s dynamic world. Hoteliers either overcharge their guests and miss bookings or undercharge them and miss the opportunity to earn greater revenue. Thanks to modern technology, now hotels can quickly solve this problem by leveraging the power of dynamic pricing. Many revenue management systems are equipped with a dynamic pricing feature that allows users to set room prices based on changing market conditions and demand. You can efficiently optimize room tariffs through AI-based dynamic price recommendations and maximize revenue.
#2 Capitalize on Day-Of-Week Pricing
Historical data on the hotel industry suggest that not all days of the week are the same for hoteliers. For example, Wednesday is better than Monday in terms of demand. Similarly, many leisure hotels receive more traffic on Saturday nights compared to Fridays. However, instead of responding differently to the changing daily demands, hoteliers apply the same price for almost every day of the week. Hypothetically speaking, hotels that charge cheaper on Mondays are likely to receive more bookings on Mondays. They can also generate substantial revenue by charging higher on Wednesdays. Your hotel may benefit from more bookings and better revenue if you keep day-of-week cycles in mind while deciding on the room price.
#3 Respond Timely to Changing Demands
Pricing of your hotel rooms should be dynamic; therefore, you can’t just set them once and forget. As we have already discussed above, dynamic pricing only makes sense when applied through the latest technology-driven automated pricing tool. Revenue Management Systems or RMS equipped with dynamic pricing features empower users to keep up with the ever changing demand patterns and set the price accordingly. It directly impacts the top and bottom lines of hotel businesses.
#4 Recognize the Value You Provide and Charge Accordingly
Studies show that hotels, especially small accommodations rather than giant chain properties, tend to keep their pricing low because they think:
- Price hike may negatively impact their rating and reviews.
- Their loyal clients have become used to their rates.
Fear of empty rooms is another common reason restricting hoteliers from charging high.
Modern-day Online Travel Agencies (OTAs) show essential indicators like:
- Value for money score
- Missing out on special events
- Filling up quickly etc.
Hoteliers should not take such indicators lightly, as their thorough analysis can help them realize the actual value they are offering to guests. After that, price revision becomes easier to charge higher based on the assessment report.
Maximize Your Revenue with Pricepoint
Pricepoint offers fully automated revenue management solutions that help hotels boost their bookings and revenue simultaneously. You can easily plug-n-play our software with your channel manager or PMS. Pricepoint incorporates AI-driven dynamic pricing and sends real-time optimal rates to OTAs. Using our comprehensive tool, you can also monitor your property performance and analyze competitors’ rates round the clock. Start your 30-day free trial now and witness how we help your revenue grow at an average of 19%.