Finding the Right Pricing Strategy for your Hotel
When deciding the right pricing strategy for your property, you first need to decide how you are going to grow your RevPAR – is it by growing your average daily rate, increasing your annual occupancy or a combination of the two. Once you have decided your overall aim, there are several factors you will need to take into consideration. If you need help to set your unique pricing strategy, why not arrange a call or demo with one of our knowledgeable team in Rate Wise for expert guidance?
It is time to do some market research on your own property and see what your customers think and what they are willing to pay! By looking at your ranking on OTAs and TripAdvisor you can get the balance right between charging too much and not charging enough. Customers don’t hold any punches and by taking stock of the average feedback you can gain knowledge on your pricing strategy.
If you don’t already use them, we would recommend you start working with a reputable benchmarking company (such as STR), to see what average rates, occupancies and RevPAR your competitors are achieving. Diving into the detail by Day of Week and your positioning should give you hard facts on where you can achieve growth.
One of the most important factors when setting your rates is your competitor set and deciding who your competitors are. You might believe your competitor is the local 5-star hotel… but is that true?
It’s important to understand your position in the market, what your competitors are achieving so you can price accordingly and not undersell or overprice your product so you can gain market share.
Market/Time of Year
Do you know the seasonal trends that affect your business? You might understand that Winter is ‘low-season’ but are you aware how far the shoulder months extend around it? Your rate should be sculpted around the 12 months of the year, based on previous trends & your competitors’ previous trends. How do you combat the inevitable drop in demand over these months without compromising your pricing strategy? Using our revenue management software, paired with the expert advice of the Rate Wise team, we can help you avoid the pitfalls that often have a knock-on effect throughout the year.
Events in the Area
Do you have an events calendar in place so you can see the times of the year where demand is higher? The calendar should be updated regularly throughout the year, allowing you to pinpoint dates where your pricing strategy needs to be amended and using our rate yielding tool, the process is simplified. Our user-friendly system means you can seamlessly update all channels at the click of a button. If you’re not aware of an event but your occupancy has started to increase, Rate Wise software looks 365 days into the future and makes suggestions based on your pickup for specific dates.
Not only does Rate Wise look 365 days into the future, we also consider past events and annual occurrences that may influence your pricing strategy. Not just focusing on the big events that take place locally, it also tracks flat/non-eventful dates and what business mix you had in house. Keeping track of events in the area, both reoccurring and once-off, allows you to adjust your forecast ensuring you are achieving optimal profits.
If you are interested in learning more about how Rate Wise can help you find the right pricing strategy, contact Liz, our Business Development Manager to arrange a Demo. We offer several different services from a yielding tool and business analysis tools to full management consultancy depending on the unique needs of your property. Contact us today to find out how we can help your property reach its full revenue potential.