6 August 2024

What is the perfect pricing strategy for the hotel industry?

Have you ever heard the story of the hotelier who swore by the pricing strategy of "I want my prices to always be x percent below my biggest competitor"? At RevControl, we've encountered variations of this strategy from time to time. While discussions about revenue management always pique our interest, this particular strategy doesn't quite align with our philosophy. Want to know why not? Allow me to delve deeper into this topic.

In the realm of revenue management, pricing decisions are often projected a year ahead. Naturally, a significant amount of attention is directed towards the external landscape:

What are competitors up to? What rates are they offering? Which booking channels are they leveraging?

We recognize the importance of competitor analysis in shaping pricing strategies. However, while the external environment is undeniably influential, it's crucial to acknowledge that revenue is generated within the confines of the hotel itself.

Here lies the crux of the matter: how can a hotel adopt the same pricing strategy as its biggest competitor, given the inherent disparities in factors such as distribution channel strategy, and quality of facilities?

Fear not! At RevControl, we understand the delicate balance between monitoring competitors and optimizing internal performance. We offer a solution tailored to address this challenge head-on with our dual-rate approach: occupancy-based rates and competitor-based rates.

The occupancy-based rate is crafted meticulously, drawing insights from your forecast and data extracted from the Property Management System (PMS). This rate is designed to reflect the anticipated demand and occupancy levels within your establishment.

On the other hand, the competitor-based rate is a strategic masterpiece, taking into account your hotel's positioning in relation to competitors. By analyzing factors such as market positioning, brand identity, and unique selling points, this rate ensures that your pricing strategy remains finely attuned to market dynamics while staying true to your hotel's distinct identity.

Now, you may wonder "how do I determine my positioning and craft an effective strategy?" Don’t worry, our great customer success team stands ready to guide you every step of the way. With their expertise and personalized support, we’ll help you navigate the intricacies of revenue management with confidence and precision.

So, as you contemplate your pricing strategy, remember – it's not about blindly following the competition. It's about leveraging insights, embracing your uniqueness, and crafting a strategy that propels your hotel towards sustainable success.

Are you ready to embark on this journey with us? Reach out to our team today and let's elevate your revenue management game together!