How to Identify the Right Room Pricing Strategy
By Gino Engels Co-Founder, OTA Insight | March 24, 2019
When it comes to hotel revenue management, getting room prices right is arguably your biggest priority. And while you may be aware that there's a science to it, there's so much to do on a daily basis that it can be difficult to determine a starting place.
On any given day, hoteliers need to do the following: keep constant track of KPIs, track activity of competitors and channel partners, keep an eye on traveler trends, and have many meetings to loop in key stakeholders.
With such an information overload, you then need to accurately forecast demand so that you can pull all the right levers to result in maximum revenue for a hotel. How on earth can you have a sense of control? The key is to avoid flying blind - and for that, you need exploitable data. Otherwise, it will be impossible to make any important decisions with confidence.
Let's look at this in context.
Setting Hotel Rates to Maximize Revenue
Hotels are economic units, so pricing depends on supply and demand at any given time. The ultimate goal is to consistently exceed (or at the very least, hit) KPIs. To forecast demand for a hotel room, you should consider two key measures: current on-the-books (OTB) reservations and your likely "pickup".
The Hotel Business Review articles are free to read on a weekly basis, but you must purchase a subscription to access
our library archives. We have more than 5000 best practice articles on hotel management and operations, so our
knowledge bank is an excellent investment! Subscribe today and access the articles in our archives.