Running a hotel or B&B comes at a cost. And just like other entrepreneurs, you're probably looking for ways to save money and generate more revenue. One way of doing this, is by applying the right pricing strategy at the right time.

 

 

More turnover by implementing the right pricing strategy

price strategy1 min  Dynamic pricing

It's how economy works. Prices are set on the basis of demand; high demand equals high prices, and vice versa. Raise the room rates when events take place near your hotel and lower the room rates on a Sunday. Always take your RevPAR into account to make sure the price alterations do generate more revenue.

 

price strategy2  Penetration price strategy

Did you just start a hotel or B&B? You may want to use the penetration pricing strategy. With this, you set the price low in the beginning to attract new guests (and positive reviews) to your hotel or B&B. When you received them, you can raise the room rates.

 

price strategy3  Psychological pricing

Many people have a psychological barrier that they don't like to cross when they buy stuff. €100 is an example of such a barrier. Hence, it's better to price your rooms at €99 instead of €101.

 

price strategy4  Based on competitors

Look at a similar hotel or B&B in the same region and analyse their pricing strategy. Then, price the cheapest room just below the cheapest room of your competitor and your most expensive one above their most expensive room. With this, you address both the guests who are looking for a great deal and guests that want to pay a little extra.

 

price strategy5  Upselling

With different room types, you can use upsell to increase revenue. When a premium room is still available, you can offer the room to guests who chose a more basic room.

 

price strategy6  Cross selling

As hotelier, you offer a bed, a room and some towels, but you can offer more than that! For instance, an extra towel, late check-out, a bottle of wine, super-fast Internet connection or a flight transfer. Of course, you can offer special packages as well, by adding breakfast, dinner or by partnering up with the car rental company. We call these events cross selling and those are easily implemented in your Booking Engine.

 

price strategy7  Discount codes

You can send a discount code by e-mail to guests who already stayed in your hotel or B&B to encourage a follow-up visit. This is especially important for people who booked through an external booking channel because you can direct them to the booking engine on your own website.

 

price strategy8  Seasonal discounts

Seasons are one of the biggest price influencers in the hotel industry. In summer, a hotel located at the Spanish coast should increase their room rates whereas a hotel in the Swiss Alps should do the same in winter.

 

price strategy9  Last-minute offers

It's already in the word. It's a little bit more than just a minute. When your room is still open for the upcoming days, you can provide your guests with last-minute deals. Especially when you want to have full occupancy in your hotel, this is a good strategy to implement.

 

price strategy10  Length-of-stay strategy

The longer a guest stays, the more discount he or she receives. For instance, when a guest stays one night, he pays 100 Euro a night; when he stays for 2 days, he'll pay 80 Euros per night. With this, people would be inclined to stay another night. This strategy is particularly good when occupancy is low. 

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What's the best pricing strategy for my hotel or B&B?

There is no one size fits all

 

The type of guests that visit your hotel, the place where you're B&B is located and the time of year are all crucial factors that come into play when deciding which pricing strategy to implement.

 

So… what to do? Think logically and try different pricing strategies!

 

After a specific time period, you'll go to your Property Management System (PMS) and compare your occupancy rate, average room price and RevPAR of the period where you didn't make use of a pricing strategy. Did it work?

 

Good luck!

 

 

 

Go to Property Management System

What's the best hotel price strategy?

There is no one size fits all…

The type of guests that visit your hotel, the place where you're B&B is located and the time of year are all crucial factors that come into play when deciding which pricing strategy to implement.

So… what to do? Think logically and try different pricing strategies!

After a specific time period, you'll go to your Property Management System (PMS) and compare your occupancy rate, average room price and RevPAR of the period where you didn't make use of a pricing strategy. Did it work?

Good luck!