How to improve the profitability of your hotel or B&B with optimal pricing
Tough competition, rising fixed costs and staffing shortages are creating serious challenges in today’s hospitality industry. To remain profitable, hospitality professionals must adapt and finetune their pricing strategies. Short on staff, time or expertise to do so? Keep reading to learn how you can implement a profitable pricing strategy efficiently!
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For a deep-dive into pricing for hospitality professionals, tune into our free hands-on webinar packed with tips and insights on Tuesday 25 June 2024, presented by Stardekk & Lighthouse. You'll gain insight into dynamic pricing and discover how to implement this strategy efficiently on multiple booking channels.
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Why you need a good hotel pricing strategy
In challenging times like these, it’s crucial to make your pricing strategy more profitable and efficient. Charging the right price at the right time through dynamic pricing is the best - if not the only - way to beat the competition and earn more per room or booking.
In essence, having a dynamic hotel pricing strategy means that you charge exactly what the guest is willing to pay at that specific time. That way, you don’t lose bookings due to overpricing and your profitability doesn’t suffer from filling rooms too cheaply in relation to your costs.
Today’s guests staying overnight often understand and accept the need for slightly higher rates. Meanwhile, offering competitive (lower) rates at strategic times can enhance your visibility on OTAs and metasearch engines in front of the right audience, resulting in more bookings.
Adopting dynamic pricing is essential, but it can also be demanding. Changing your rates daily requires tracking trends, competitors’ prices, market conditions, … In what follows, we’re showing you how to overcome these challenges and improve your pricing strategy in an efficient way.
How to improve your hotel pricing strategy
Adjust your room prices daily
Dynamic pricing isn’t just for the big players anymore. It has become a vital aspect of running a hotel, B&B or vacation rental profitably. By regularly adjusting your room rates based on demand, you can charge more during peak times and offer discounts when it’s quieter. This keeps your hotel competitive all year round and ensures you’re always getting the best possible price for each room, boosting your profitability.
Instead of just looking at high versus low seasons and weekdays versus weekends, adjust your prices more regularly. Raise your prices in response to events in your area, prolonged weekends, competitors and your real-time occupancy. For example, when your hotel is unexpectedly almost fully booked, you can charge a higher rate for the remaining room(s).
Simultaneously, this allows you to offer more competitive rates and promotions (e.g. free breakfast included, early-bird or last-minute discount) at low-demand times to stimulate bookings and longer stays.
Automate your hotel pricing
Implementing a profitable pricing strategy – though crucial – can be very complex and time-consuming. That’s why more and more accommodation owners are opting for automated dynamic pricing. Thanks to new technology, dynamic pricing has now become accessible to accommodations that may not have the necessary staff, time or know-how that this task usually requires.
Pricing Manager – our smart integrated pricing tool – automates your pricing strategy through daily data-driven price recommendations. It looks at past trends, real-time market conditions, your own occupancy and competitors’ rates to determine the most ideal prices for your property for maximum revenue. By integrating it with our Channel Manager, you can send those optimised rates directly to all your distribution channels, ensuring maximum efficiency.
Increase the value alongside your prices
With staffing and other fixed costs on the rise, accommodations should increase their rates slightly, especially since travellers are now willing to pay more for overnight stays. At the same time, however, guests are more demanding than ever, so make sure to set the right expectations and meet or exceed them during the stay.
Rather than merely raising your prices, elevate the offered value or experience too. Think about adding extra features to rooms and upgrading certain ones to deluxe rooms or suites, if possible. In addition, create appealing packages that offer more than the usual stay to nudge guests towards the higher-value option rather than the (cheapest) standard rate.
The key? Clearly highlight all the perks and amenities on your website, direct booking module and other booking channels through photos and detailed descriptions. This way, when guests see the price, they also see the amazing value they’re getting.
Try automated hotel pricing for free
Would you like to take the guesswork out of your pricing strategy and automate the process? You can now discover the advantages of Pricing Manager in a 14-day free trial. Fill out the form below and start boosting your bookings, revenue, and profitability!
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