July 12, 2023
There are a variety of hotel pricing strategies that can be used to boost your revenue, but how do you determine which strategy is best for your hotel?
Developing a pricing strategy that can adjust to market changes while remaining competitive requires multiple considerations. You should account for industry trends, competitors, seasonality, and guest segmentation.
Below, we’ll cover everything you need to create a hotel pricing strategy with Solonis that maximizes your booking rates and revenue.
The Importance of a Hotel Pricing Strategy
A well-coordinated hotel pricing strategy can help you stand out from the competition, maximize your ROI, and take advantage of actionable insights from forecasting. But to achieve these benefits, you first need to create the right hotel pricing strategy for you.
Developing a pricing strategy is a crucial part of hotel revenue management and consists of many factors, including:
- Rates you charge per hotel room in an effort to sell as many rooms as possible
- Creating profit in the most optimal manner
- Balancing fair pricing while still boosting revenue
Although it can be challenging to create the right hotel pricing strategy, a hotel booking system will help your strategy yield more sold rooms and increase occupancy and profitability.
Developing Your Hotel Pricing Strategy with Solonis
While choosing a hotel pricing strategy requires some manual work, Solonis gives you the features and options you need to adopt the plan that is ideal for your property. Consider these factors, and learn how Solonis can assist in creating your hotel pricing strategy.
Track Supply and Demand
As the hospitality industry is no stranger to demand fluctuations, monitoring supply and demand is more important than ever for creating a hotel pricing strategy. To respond appropriately to the demands of travelers, hotels should ensure their hotel pricing strategy is equipped with cutting-edge hotel technology that’s designed to maximize bookings and efficiency.
Solonis is the perfect hotel pricing solution for your needs and is designed to increase your occupancy rate and bottom line. With real-time reports, Solonis makes it easy to analyze booking channels, room types, the average length of stay, booking behavior, and more to give you the data you need to adapt your pricing based on supply and demand.
When developing your hotel pricing strategy that maximizes your bookings, it’s crucial to ensure your rates are optimized from day to day. However, manually establishing the best rates for your rooms every single day is highly inefficient.
With Solonis dynamic pricing tools, you can automatically match your room price to demand. These tools allow you to offer the best rate to ensure your pricing strategy is optimized to boost Average Daily Rate (ADR) and RevPAR.
Best Available Rates (BAR)
Best Available Rate (BAR) is a type of dynamic pricing that sets the lowest fixed price for a standard room type. This offers the lowest publicly available rate for a room or property. For example, instead of paying the same price for each room night, a guest could pay different prices for each night of their stay.
While the Best Available Rate is typically the initial rate put up in Solonis, you can change the rate plan for your entire hotel to match the demand of travelers in real-time. With just two mouse clicks, you can apply these rate changes for a certain day or date range across multiple properties.
Keep an Eye Open for New Opportunities
Supply and demand are just the tip of the iceberg when creating a hotel pricing strategy. In this fiercely competitive industry, it isn’t enough to just meet demands; you must exceed them. Your pricing strategy should be adaptable to new opportunities that arise which will allow you to stand out from the competition. Solonis has a few features which will allow you to keep a pulse on the industry.
Forecasting is an essential tool for hoteliers to accurately analyze demand, price changes, and trends.
To create an accurate forecast, you need access to real-time data and booking information from prior months based on seasons, events, needs, and promotions. You can then utilize this historical data to plan your rates proactively based on past demands and trends, improving your hotel pricing strategy.
Additionally, with Solonis’ advanced business intelligence (BI) tools, you’ll gain actionable insights into your operations to make necessary improvements and fine-tune your hotel pricing strategy.
Length-of-stay pricing sets room prices based on how long the guests plan on staying. For example, if there is a special weekend event in town, a hotelier might want to limit stays to full-weekend bookings to capitalize on the influx of tourists.
This type of pricing enables you to charge guests a single charge depending on their arrival date and the total number of reserved nights for their whole stay. This method is best when you know guests will want to stay for more than one day. Doing so will help maintain and improve your return on investment (ROI). Even if there are fewer bookings during these times, the singular charge across the entire stay ensures you earn a profit.
Additionally, length-of-stay pricing:
- Determines how long people stay during peak or slow times
- Optimizes your inventory management
- Removes the risk of rooms not being booked during high-demand periods
With Solonis, you can manage the kinds of reservations you accept for particular dates using length-of-stay restrictions. It’s as simple as:
- Set a length-of-stay restriction determined by the Reservation Arrive Date
- Set up a Nightly Rate Table with prices by the length of stay
Depending on your hotel, your target market, and current demand patterns, length-of-stay pricing can be a valuable part of your hotel pricing strategy tool kit.
Your hotel pricing strategy shouldn’t only be customized and adjusted for individual bookings, but group bookings as well. Corporate travelers and families, for example, all have different stay patterns and levels of willingness to spend when you look at your diverse guest segments.
A hotel pricing strategy that uses segment-based pricing will allow you to capitalize on the most revenue opportunities available. With Solonis, pricing your hotel rooms for both individual and group reservations with BAR and Dynamic Pricing tools provides the most efficient pricing strategy across every touchpoint.
Create the Perfect Hotel Pricing Strategy with Solonis
Creating a hotel pricing strategy doesn’t have to be difficult. Solonis is here to help you maximize your revenue and reservations with innovative tools to implement your strategy flawlessly.
Solonis is the perfect hotel pricing solution for your needs and is designed to increase your occupancy rate and bottom line. Although helping you create a hotel pricing strategy is just one area Solonis can grow your business.
Discover how Solonis can help you implement your hotel pricing strategy and make more data-backed decisions for your hotel by requesting a demo today.