To reach such heights in terms of profit or revenue generation one needs to have immense knowledge of the hospitality industry and its marketplace. (As knowledge alone creates all the difference.)

This is why every hotel owner puts a lot into serving its guests but only a few get an impressive revenue collection. 

Most of the time, this happens because of the fragile pricing strategies hoteliers set up without analyzing guests’ behavior and insights into the latest marketing techniques.

In one of our old blogs, we previously discussed various pricing strategies that hotels should be aware of. But in this article, I aim to expand upon that list and delve into some more unique pricing strategies to help you level up your revenue generation game.

So get ready and follow along if you want to attain excellence in the revenue department of your hotel.

Why Is It Important to Set Pricing Strategies?

The sole purpose of any pricing strategy is to optimize your revenue.

Let me be clear that setting prices on your rooms and services doesn’t count as a pricing strategy. It is how you mold and manipulate your prices according to the market scenario and your guests.

Let’s examine this with a scenario:  

All the hotels near your property are struggling through the shoulder season. To stay afloat and drive more bookings, they cut down their prices, whereas you kept them intact. Turns out, they came out well and you experienced a great loss.

Therefore, you cannot just put up the prices and let it be. It is a process that needs constant revision. You must have a great sense of the current market and ongoing trends in price modulation to do so.

 But I’ve got it all covered in the next section Let’s hop in, shall we?

Pricing Strategies to Optimize Your Hotel Revenue

Hotel revenue management is a tricky affair and there’s no single magic formula to optimize it. You require a blend of various strategies to ripe out the maximum benefits.

This is why I am mentioning some unique tactics for you to skyrocket your hotel revenue. 

1. Value-based pricing

The simplest pricing strategy is value-based. It is the cost that your service must get in return.

For example, a smoking room will have more price than a non-smoking room because it has an additional service that tops up its value. Same way, beach-facing rooms will have more value and thus more price.

So, what you are providing to your guests, how much that particular service costs you, or its value range across the market decides this type of pricing.

Value-based pricing is never negotiable. Because it drives you the minimum profit your rooms & services deserve.

2. Package pricing

Nowadays travelers lookout for good packages instead of arranging things separately. So it is important to build your packages and let your guests avail them at the right prices.

By including taxi/cab rides, complimentary meals, a local guide or tour, co-working spaces, a spa, laundry facilities, and much more in a package, you can make comparatively high revenue.

What you do is: keep a room booking, let's say at ₹8,457 for a week (high from its usual value), and a package with all the facilities at ₹9,849. Your guest will perceive that within a minor difference, they’re getting so many things.

Most of the time, they do not require all of these facilities but still tend to get overwhelmed by them and sign up willingly.

Even if they use them all, it is anyway beneficial for you. Because it helps in upselling your services.

3. Captive product pricing

Captive product pricing is to set a combined price for two or more services that are co-dependent.

For example, an ordinary room costs ₹5,000, and using the swimming pool has an additional charge of ₹800 which makes the total ₹5,800. However, if you choose a poolside room that costs ₹5,600 then there are no additional charges for using the pool.

This is how you can increase the sales of your poolside rooms. So every person who wishes to swim will ultimately buy your poolside room that costs high.

This pricing helps you increase the sales of your best rooms by adding a complementary thing to them.

4. Market-penetration pricing

When you introduce a new service or upgrade your hospitality, it is important to make it popular and known among your guests. This is the only way to make it win its place in the market.

To give this new service optimum exposure, you need a market-penetration pricing strategy according to which, you must keep it partially free at the start and increase the price with time.

If you have opened an in-house restaurant at your hotel, you can keep the first meal free for all your guests. This will market your restaurant effectively and its sales will increase fast.

5. Psychological pricing

A psychological pricing strategy is important for attracting your guests. It makes your price look good and affordable.

This price plays with your guests' psychology and convinces them that it is reasonable. The basic example is putting ₹999 for the swimming pool charges instead of ₹1000. This difference of one number somehow creates a lot of differences in the human brain.

Besides this, promoting offers and discounts is also a psychological game that excites your guests. They give in quickly if you showcase that a ₹9,899 package is available at only ₹7,599 if they book within a day. Note: This is how you make sales in your shoulder season.

Learn more about aligning your marketing strategies with your guest’s psychological responses below.

Psychological Principles for Better Hotel Marketing

6. Promotional Pricing

This is the average and the comparatively lowest price you use to promote your hotel. It helps attract your guests to your website. With this, they explore other things you offer and increase your chances of getting bookings.

So if the lowest room or package that is available at your hotel is ₹1,899 and the highest package is ₹10,899 then your promotional price must be the former one that is lowest.

It will amaze your guests that your packages are starting at such affordable prices and thus, they will visit your website. This will drive more traffic to your website and will increase your bookings and revenue altogether.

 Promotional pieces are mostly the one that highlights the least starting prices of your rooms.

Dynamic Pricing to Ace Your Strategic Game

All the strategies I discussed above are proven for optimizing your revenue.

But what is the real foundation for them?

Dynamic pricing!

The marketplace is ever-changing. What is selling out this week might not get any attention in the upcoming weeks. Therefore, you need to change every instant. (I am not exaggerating)

Recently when I was planning to book a homestay through an OTA platform, I was amazed at how quickly the price was fluctuating.

When I visited this XYZ property many times, its price went up within hours because they tracked that I am interested in it and will book eventually. After that, I started exploring other properties for a couple of days. Guess what! The rate of that XYZ property dropped again.

A dynamic pricing strategy analyzes every aspect of the marketplace and sets an ideal price for your services. It keeps fidgeting rooms’ prices across all your online profiles. This fluctuation in price ensures maximum profit at any given time.

But making all these calculations and analyzing the prices manually is NOT easy. You need a perfect revenue management system to do so. You can check out eZee Mint which streamlines the process of setting intelligent pricing strategies at the right time to optimize your revenue.

 

The post Secrets to Boost Your Hotel’s Revenue: Pricing Strategies You Need to Know appeared first on eZee Absolute.

Not to mention, even I have been a lot more vocal about this sought-after hospitality phenomenon lately. However, there’s still more to cover.

Today, this blog is going to be all things hotel revenue management systems.

I am not just going to give you an overview, but also help you learn about the features that make it worth it, and how you, a hotelier can pick the right system from the right vendor.

The Current Scenario of Hotel Revenue Management in The Industry

Over the years the hospitality industry has witnessed multiple transformations — the rising need for competitive pricing strategies, penetration of mobile devices, changing traveler preferences, and more.

And all of it directly impacted the revenue management segment in the industry, taking it from nice-to-have to a must-have.

According to various reports, the revenue management market is expected to grow to USD 22.4 billion by 2024.

Furthermore, I have been in this industry for quite some time now and witnessed firsthand how the industry is becoming receptive to revenue management. Be it about outsourcing revenue managers or setting up in-house departments, hotels are putting in a significant amount of effort.

However, if we take a wider look, there are many properties that aren’t sure whether revenue management really makes a difference. 

Not just that. 

Many don’t even bother to focus on optimizing their revenue; either because they lack expertise and resources, or just find it overwhelming.

Prominent Features of a Hotel Revenue Management System

While the idea of revenue management could be a massive deal for hotels, revenue management software sorts everything out at ease.

It makes revenue management simple and delivers substantial results.

Wondering what exactly a revenue management system is?

A hotel revenue management software or system is a tool that automates the process of using data to determine the right price for hotel rooms and maximize the overall revenue of the hotel business.

Now, there are several hotel revenue management systems available in the market, but not all of them are worth all the tea in china. You as a hotelier must analyze every aspect of the system and then go for one.

To make it a little easier for you, the following are a few hotel revenue management system features that you need to look at while opting for one.  

1. Intuitive dashboard

The first and foremost thing to look for is how easy the system is to understand and operate. And that you can determine by looking at that dashboard.

An intuitive dashboard makes it as easy as ABC for the end-users to understand, use the system, and get a quick insight into their data, and drive revenue decisions for the properties.

Simply put, even those who possess minimal technical expertise can make the best out of the system while they are first learning to use the program.

As a cherry on top, also consider whether the dashboard allows various types of views such as list and calendar views. These types of dashboard orientation allow users to spot errors and crucial data points.

2. Multi-dimensional property analysis

The subhead sounds a little too sophisticated? Let me help you understand by breaking it down. (Modafinil Smart Drug)

One of the core aspects of revenue management is analysis — both of your property and competitors.

An ideal hotel revenue management system should be able to analyze your property’s performance on various parameters to help you identify the scope of improvements.

Furthermore, it should also be able to perform in-depth competitor analysis, comparing their rate plans, performance insights, pricing strategies, and more. Additionally, it helps you determine where your competitors are lacking and you’re ahead, and vice versa.

3. Intelligent pricing engine

If I was a revenue manager I would be able to determine what’s happening in the industry at present, how other hotels are pricing their rooms, what travelers are seeking, etc. Because I can see it first hand and make changes accordingly.

But for a machine or a system to do the same, it requires data points and the ability to make sense of that data.

This is where an intelligent pricing engine comes in.

When you’re in your research phase of finding the best revenue management software, make sure the system is able to optimize hotel pricing based on data from market behavior and its consumers.

Dynamic pricing (also known as surge pricing, demand pricing, or time-based pricing) is a great example of price intelligence. It is a strategy that accommodation businesses use to set flexible prices for their rooms based on current market demands.

In the simplest words, intelligent pricing is all about delivering what your guests expect whilst being profitable for you. 

4. Super detailed reporting

This is another vital feature you need to look out for while choosing the right revenue management system for your property.

When you invest in a system to gain meaningful revenue, you have to have a detailed view of what’s happening and reports are your friend here.

Be it about your property’s analysis, pickup report, ADR report, revenue forecast, or competitor analysis, the reports should deliver even the tiniest of the details.

If the system doesn’t offer that, then you might want to continue.

The Best Revenue Management System Out There

Which is the best hotel revenue management software for hotels? 

This is exactly what you’re thinking. Aren’t you? 

Well, there are various revenue management systems available for hotels in the market and each of them is great in its own way. 

However, being in the hospitality industry for so long, my money is on eZee Mint. 

eZee Mint is one of the smartest revenue management systems in the hotel industry at present that helps in optimizing revenue through dynamic pricing. 

The system is designed and developed by considering the vastness of revenue management. It works upon a series of criteria including weekly occupancy, seasonality, lead time, demands, and last-minute booking to calculate competitive rates for the available inventory.

Simply put, it not only offers pricing strategies but also helps you analyze your hotel’s entire revenue infrastructure and boosts the bottom line significantly.

The post Pick the Hotel Revenue Management System That Has These Features appeared first on eZee Absolute.