September 24, 2025
Setting hotel room prices isn’t just about filling beds—it’s about maximizing revenue. From dynamic pricing to upselling, forecasting, and leveraging AI-powered revenue management systems, hotels can implement smarter pricing strategies to increase ADR, RevPAR, and long-term profitability.
Pricing is one of the most decisive factors in hotel profitability. While it may look simple on the surface, setting the right room rates is part of a much bigger game: revenue management. The right pricing strategy can be the difference between strong profits and underperformance, especially in competitive markets or during periods of fluctuating demand.
In this article, we’ll cover what revenue management is, why forecasting matters, the main factors influencing hotel pricing, and 10 proven pricing strategies for hotels in 2024 and beyond.
Revenue management is the practice of selling the right product to the right customer at the right time and price. It relies on data analysis and forecasting to predict demand and set optimal rates.
The concept originated in the airline industry in the 1980s and quickly spread to hotels. Initially, it was used mainly during peak seasons or high-demand events, but today, revenue management is equally vital during low-demand cycles. With the right tools, hotels can avoid price wars, stimulate demand in slow periods, and maintain profitability even during crises like COVID-19.
Even hotels with experienced revenue managers can lose revenue if prices are set without data-driven analysis. A strong pricing strategy allows hoteliers to:
No two hotels are the same, but these common factors almost always affect pricing decisions:
Forecasting is at the core of revenue management. Traditionally, hoteliers relied heavily on historical booking data and patterns. But today, especially in volatile markets, relying only on the past isn’t enough.
To forecast effectively, hotels need real-time market data—from competitor pricing to flight searches and local event calendars. Manual forecasting is time-consuming and error-prone, which is why many hotels now use AI-powered RMS (Revenue Management Systems) to analyze data and deliver automated price recommendations.
Tips for better forecasting:
Here are 10 proven strategies hoteliers can adapt to their market situation:
Bundle rooms with spa treatments, tours, or meals to increase guest spend. Tailor packages for different customer segments to maximize value.
Maintain consistent pricing across OTAs and direct bookings. Add value (e.g., free late checkout or welcome drinks) to incentivize direct bookings without cutting rates.
Offer discount codes to guests who first booked via OTAs, encouraging future direct reservations.
Introduce minimum or maximum stay requirements to manage demand during peak events and avoid one-night “gap nights” that reduce profitability.
Post-COVID, guests value flexibility. Consider hybrid models like flexible non-refundable rates, which offer discounts but allow rebooking without penalties.
Create flash sales for unsold inventory to capture spontaneous travelers and reduce empty rooms.
Encourage guests to upgrade rooms or add paid amenities. This can be done via pre-arrival emails, at check-in, or through apps.
Offer complementary services (e.g., wine, tours, spa treatments). Cross-selling adds value and enhances the guest experience.
Strong reviews boost demand and allow higher pricing power. Proactively request reviews, respond to feedback, and maintain high service standards.
Dynamic pricing is the cornerstone of modern revenue management. Unlike static pricing, it adjusts room rates in real time based on supply, demand, competitor pricing, and market conditions.
The result? Hotels can:
Manually monitoring data and adjusting prices is nearly impossible, especially in volatile markets. Automated RMS solutions like Pricepoint are designed to:
With Pricepoint, even small independent hotels can leverage airline-grade AI pricing algorithms to stay competitive.
👉 Want to stop guessing and start optimizing? Try Pricepoint free for 30 days and see how AI-powered dynamic pricing can transform your hotel’s revenue.
