Getting into the hotel business is a dream for many people. And it is no wonder, it is a great way of creating a stable revenue. However, like with all businesses, starting small carries plenty of challenges, and the situation is the same when it comes to smaller hotels.
The big players in the hotel game are quite experienced and have the tools and knowledge to determine what the best pricing methods are, e.g. high-end pricing software and years of solid data to draw conclusions from.
On the other hand, smaller hotel owners and managers are less experienced, meaning that it is necessary to take some steps in order to optimize small hotel revenue.
Let’s take a look at a couple of steps that will help you optimize your small hotel revenue.
Factors that directly impact initial pricing
When creating hotel room pricing, it is essential to remain realistic. You want to actually make a profit don’t you? Well, in that case, the following are the most important parameters you should take into consideration.
- Location — This the first parameter that is going to dictate your price. Is your hotel downtown? Is it in the suburbs? Is it in the business district? Are you near the seaside? Are there any tourist attractions or significant landmarks nearby? All of these things have a significant impact on what price you are going to rent the rooms for.
- Competition — Taking a look at the competition is always a good thing. The most important things you should consider about the competitor’s hotel is its pricing, location and rating. This will give you a great idea of where to start when pricing your rooms.
- Hotel rating — The rating of your hotel is going to directly impact the price you are going to ask for when renting rooms to your customers. Check what you are offering that competition isn’t. If you conclude that your offer is the same, consider offering a bit more to your future customers for the same price.
- Value — Pricing is not just about being cheaper than all the competitors, it’s about offering good value for the money. What is it that sets your property apart? What kind of unique experience will the visitor get there that they won’t be able to get anywhere else? You may be able to pamper them with exceptional service and interesting perks, and the final price should reflect the overall experience.
- Guest reviews — People trust the opinion of their peers a lot more than they trust marketing material. Even if you offer luxurious rooms with great views, no one will want to pay good money for rooms in a hotel that other guests have rated poorly. Since guest reviews play a big role in the final pricing of a room, you need to do your best to make your guests feel good and ask for feedback.
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