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Are you pricing your rooms right? Here are 5 tips to make sure


hotel room rate

Deciding on hotel rates is one of the toughest decisions for hoteliers and it requires a lot of planning, researching, doing their homework and re-evaluations. There are numerous key factors and influences that come into play when deciding on hotel rates, because not only do you want to fix them but you also want the rates to grow.

We bring to you 5 successful approaches to grow hotel rates:

1. Evaluate the various distribution segments

Hotels need to carefully analyze each and every distribution segment for the year gone by. It’s imperative to review the segments that worked and the ones which were not ineffective.
The various distribution channels need to be analyzed, and remember to factor in the OTA commission rates, hotels should ensure that they vigorously research the different commissions that a channel provider charges before
Finalizing on the one that works for them.

Don’t always think that a high tariff shall generate higher returns, a hotel should calculate the ADR’s of their previous year and decide whether they were too generous or too rigid with their best available room rate and plan accordingly.

2. Check out the Competition

Know your competition in and out – have details on how many rooms the hotel has, their price ranges, which their primary business segment is and so on. It is crucial that a hotel is up to date on their market and competition research.

A good tactic for hotels would be to set one room rate at the same price point as their competitor and another room at a slightly higher rate. It is not always profitable to have cheaper rates than your competition, you may fill up with regard to occupancy but you would suffer on your ADR. With BookingSuite’s RateIntelligence tool, you can track the rates of your closest competitors. By implementing the above mentioned tactic, a hotel can sell their lower value rooms to guests who are looking for best deals available but still make more money than their competitors by selling the higher priced rooms.

hotel revenu management

3. Promote maximum sales via the hotel’s website

If a guest books directly via a hotels website, it becomes the most profitable booking for the hotel because they save on the OTA commission costs. This will have one of the biggest impacts on promoting rate growth.

Hotels should ensure that their own website offers the best available rate across all their various distribution channels, their websites should be user friendly and easy to book through; and having a mobile version is an added advantage.

Even if hotels can’t offer lower rates on their own website as compared to their other channels, they can still give a special add on to incentivise guests to book directly with them i.e. a room upgrade, complimentary breakfast, free Wi-Fi, discounts on F&B etc.

4. Tracking availability of rooms

A month in advance a hotel may look that they are fully booked but closer to the day a completely different picture is shown. Many OTAs offer free cancellation for the hotels available on their websites which can create false promises of hotel rooms being booked. Hotels should review the booking and cancellation trends of their rooms especially in regard to the various channels that they are available on and thus plan their rates and room inventory accordingly.

5. Tackling Group Bookings

The everlasting enigma for all hotels – do we need them to increase the hotel’s occupancy, or are they bringing down our ADR? Hotels should identify and see whether the rates offered to their group bookings worked in favour of the hotel or not. Hotels with a large room inventory may require to give a competitive corporate rate for group bookings which can help sustain the ADR of the hotel during the slower months, but hotels with small inventories can maybe offer a blanket discount on the Best Available or additional perks rather than a fixed price for their group bookings.

These are some of the most effective approaches that a hotel should definitely consider when it comes to growing hotel rates. By following the above they shall ensure that the foundation of their planning is extremely secure. An added supplement to effectively growing the hotels rates and efficiently tracking the hotels previous history and generating the required reports is to implement an effective PMS like Hotelogix which can help guide the hotel in the best possible manner.

hotel property management