As the season changes, the footfall of the tourists and visitors to the hotel also varies. The rooms’ pricing should vary in sync with these trends, and basic rates need to be kept in mind
Fremont, CA: The global economy is ever-evolving, and the key to having an effective revenue management strategy is by adopting a systematic approach towards pricing. So, while making any business decision, a proper thought on the hotel pricing strategies is vital.
Overall, a hotelier should understand and peek into all the avenues for fixing proper room rate pricing; with the assistance of these strategies, an increase in business revenue can be seen. Some guidelines can be followed to implement the most powerful and smart pricing strategies to boost hotel revenue.
Just initiating with the pricing strategy won’t work effectively if the hotelier is not aware of the fundamentals and does not consider them. Some steps which need to be considered to create a proper pricing strategy for the hotel:
1. Understanding the target audience
2. Knowing what the guest wants via survey
3. Analyzing all the data and setting price accordingly
Once the hotelier has this information in hand, it will be effortless to decide on the hotel room pricing models.
The factors that impact hotel room pricing:
The entire pricing strategy process becomes complex as several factors that impact room pricing in the hotel industry need to be considered. Some of them are:
Cost
Cost price includes raw materials, sales and distribution overheads, advertisement, and sales promotion costs. Hence, it is incredibly vital to analyze all the costs incurred before setting the prices to minimize losses.
[vendor_logo_first]Demand and Market Structure
Market demand for service has a substantial impact on pricing. In case there is no demand for the service or hotel room, it cannot be sold at all. However, different guests may react differently towards the variations in price.
Laws and Regulations by the Government
Government regulations and laws persuade hoteliers to decide instant price change decisions. The laws set on hotels’ activities can affect the hotel room pricing, leading to the controlling of prices at minimum or maximum levels.
Seasons
Seasons like Peak and weak times can cause drastic fluctuations in tourists and visitor rates to a destination. This is the primary reason why sometimes the hoteliers need to change or completely revamp their strategies for room pricing strategies to earn a profit.
Any Variable Circumstances
Any situation, such as a natural calamity that occurs all of a sudden, can impact pricing. Examples include earthquake, tsunami, or any announcement from the government like demonetization, new tax levies, and such likes.
After understanding these factors and basics that impact the costing of the room price, hoteliers need to come up with the best strategy to adopt from now onwards to boost the hotel revenue.
See also: Top Travel and Hospitality Solution Companies
