8 Most Effective Hotel Pricing Strategies to Increase Your Revenue in 2022

The price of hotel rooms is a crucial aspect of managing hotel revenue. It is the price you set per hotel room to fill as many rooms as possible and earn as much money from them. It’s that sweet spot between pricing enough to break even and to charge fairly to avoid losing clients to rival businesses.

In the hotel industry, your plan is crucial because it aids in room sales, increased occupancy, and increased profitability. Additionally, you risk losing money and failing to pay your overhead expenses if you don’t charge enough. 

Read the most effective hotel pricing strategies given below to raise your revenue. 

8 Most Effective Hotel Pricing Strategies

Competitor-based

Looking at the competition is the best way to gauge how well you’re doing or the trends in the market. In addition to offering helpful suggestions for developing, the competition also offers pricing tactics that you can use. It’s crucial to consider your direct rivals in the same market and star category as you. Understanding the prices your rivals are charging for rooms is the first step in developing a pricing strategy based on hotel room rates. 

Forecasting-based

Setting prices based on what you anticipate the demand to be is effective when done through forecasting. This expectation depends on knowing your hotel’s occupancy statistics, revenue, room rate, and average spend per room for the most recent few months and the same time last year, as well as considering demand and events. One of the most crucial methods for hotels is this one.

Occupancy-based 

Another popular method of determining hotel prices is the occupancy-based pricing strategy, which is one of the best ways to boost room income. Based on supply and demand, an occupancy-based hotel prices strategy rises when supply is insufficient to meet demand. On the other hand, in low season, you might offer lower rates to boost occupancy to secure revenue.

Incentive-based

Customers are rewarded with lower prices through discounts, promotions, and other packages as part of an incentive-based pricing strategy, which encourages them to make a reservation. By encouraging repeat visitors to book directly with your hotel and cutting out the middleman, you can adopt this technique by providing discount codes or promotions through email marketing and web marketing to your loyal customers.

Cancellation Procedure

The cancellation pricing plan might increase your revenue surprisingly efficiently. In essence, individuals pay less if they make a non-refundable reservation. By doing so, your hotel can minimise costs while selling rooms at a profit. The guest won’t receive a refund if they cancel; therefore, since you have already committed to receiving payment for the accommodation, you can charge a reduced price to resell the room in the event of a cancellation. This tactic is beneficial during the busy season.

Length-Of-Stay Technique

This kind of pricing is efficient since it enables you to charge a flat amount for the duration of a guest’s stay, regardless of how long they stay and when they arrive. However, to employ this method, you must first determine the optimal price using your current reservations and estimates to gauge demand.

For instance, you might establish a minimum stay for the duration of a festival or other special event to lock in some bookings and guarantee an increased number of nights’ stay. 

Based on Guest Type

Pricing based on guest type is comparable to segment-based pricing in that different guests are assessed at higher prices. Visitors can be divided into numerous categories in this kind of price structure according to their preferences, the reason they are there, their age, class, location, or vocation.

RateGain is an expert network for the hotel and travel industries where you can learn more about hotel pricing strategy in the Hospitality Industry. Experts use its insights, techniques, and recommendations to enhance customer experience, maximise revenue, rethink processes, and find inspiration.

RateGain is the right platform to get all the relevant information about the Hotel Management system.