Establishing a competitive room pricing strategy is a top priority for all independent hoteliers. Whether activated annually or adjusted seasonally, it should effectively drive bookings, influence market value, stimulate revenue and profit growth and, ultimately, support an independent hotel’s ability to achieve its long-term operational goals. As you prepare for the holiday travel season and beyond, here are 3 tips to help you craft a winning room pricing strategy for your independent hotel.
Review your booking history
We’ll never truly know what the future holds, but looking at the past can provide some great insights. Examining your hotel’s booking history will help identify previous demand trends, successful rate offerings, efficient revenue capture periods and other key insights that play roles in your rate pricing strategy. The more historical data you can gather will allow for stronger, fact-based decision making, as opposed to relying on questionable guesswork.
Define opportunities and threats
There are countless opportunities and threats that affect travel and hotel bookings, but independents can take advantage of or mitigate many of these external factors by proactively identifying them and countering their impact with appropriate pricing. Here are a common opportunity and threat that independents must account for when developing their pricing strategy:
- Conferences & conventions: Tourism agencies attract large, revenue-driving events to markets across the country, so with ready-made booking opportunities, independent hoteliers must strategize how to economically capitalize.
- Construction: Construction projects are classic short-term pain/long-term gain situations, so to navigate the temporary obstacles, hoteliers must monitor transportation updates to stay aware of their progress and accurately adjust pricing to remain attractive to travelers.
Monitor your competitors
Monitoring local market competition is one of the more challenging aspects of developing and executing a winning room pricing strategy. It includes comparing your product offerings against your competitors and then deciding to raise rates in an attempt to capture more revenue, lower rates to drive occupancy or offer comparable rates to remain competitive and allow travelers to decide which hotel delivers the best value for their dollars. Staying informed about your competitors is tough, but it will ensure that your room pricing strategy remains aligned with traveler expectations and delivers the revenue and profits needed for success.