Based on best available rate (BAR), or what is commonly known as BAR pricing, it’s easy for hotels to implement and manage, but to combat the growing complexity of the hotel distribution landscape hoteliers should move to a more holistic revenue strategy that employs new technologies … These layers combine to form a strategic pricing pyramid. Simply put, Hotel Yield Management involves selling the right room to the right customer at the right time. You will be able to come up with a competitor-based hotel room rate pricing strategy only when you understand at what rates your competitors are selling their rooms. Hotel Pricing Strategy #3: Switch to open pricing: Most hotels today use a fixed-tier pricing approach. This can be made up of multiple pricing approaches. Click to tweet: 5 questions to determine a hotel’s optimal #pricing. Traditionally, our hotel pricing strategy has been for rates to end in a “9” based on the psychology of getting as close to the next round number as possible without going over it. Hotelogix, Axisroom, And RepUp Enters Into Three-Way Merger, Set To Provide The First Of Its Kind Hospitality Solution. In a nutshell, hoteliers can ensure all inventory is available across all channels, improving efficiency of their product and the response offered to the traveller. A deep understanding of how products and services create value for customers is the key input to the development of a price structure that determines how your offerings should be priced. Even though this strategy leads to losses initially, it results in many customers shifting to the brand because of the low prices. More and more of us are now booking travel via mobile devices. Consider this, for example: Compare Retail Pricing. How you set your prices can have positive or negative implications. In order to understand hospitality today, it is first necessary to understand how hotels segment their business. This gives hotels the ability to price all room types, channels and dates independently of each other to maximize revenues without having to close any off. Even though this strategy leads to losses initially, it results in many customers shifting to the brand because of the low prices. An effective pricing strategy requires flexibility throughout each phase of travel recovery. Consequently, by properly segmenting potential guests, we can be more effic… An example would be a DVD manufacturer offering different DVD recorders with different features at different prices e.g. Within the 24 hours leading up to check-in, OTAs received 67% of mobile bookings compared with 41% generated by hotel suppliers. A study by Criteo found that in Q1 2016, 27% of all global travel bookings were made via a smartphone. Make sure that you are pricing your hotel rooms based on supply and demand. Packages could be as simple and universal as “Breakfast packages’ (which could include an elaborate buffet breakfast for a price that is much more affordable than what it would cost the guest if they were to opt for it separately) or something more personalized like a ‘Honeymoon package’ where you could throw in multiple activities and services for couples at an irresistible price. Open pricing is the idea of raising or lowering prices on different channels based on demand, rather than closing channels out or adding length-of-stay restrictions to discounted channels when demand is high. After you integrate, you really need to take advantage of automation. Price lets us segment and attract different target markets with the objective of maximizing revenue. While significantly dropping ADR may be a temporary solution, it can take much longer to recover from.