Pricing management

Evolution

Don’t be surprised if overnight new developments come about. The OTA continues looking for creative ways to obtain more competitive offers than their competition. Best Price is still the name of the game in online sales. With the move of Google into meta-search, the rate parity struggle by hotels and a competitive battle between OTA will only intensify. And with the social media and networks changing consumer internet behavior we certainly have interesting times ahead of us.

Hotel pricing matrix

Every hotel should have the tools to sell expensive or cheap when needed. Such tools we call price or BAR levels. In your pricing matrix WE NOT ONLY include various BAR levels to offer at different levels of demand but also putting together your Pricing Matrix taking the following criteria into account:

Build your pricing points (BAR levels) as per expected level demand
Use a maximum of 12 BAR levels
Check the price compression from one BAR level to the next one

Market-based pricing

Tactics for market domination

Conventional wisdom- Price should be set to sell the greatest number of rooms at the highest possible price in the market. RM tactics- Forget cost-based pricing, we will set prices consumers will accept in a flexible environment, reduce costs, if necessary

Rate fencing

Rate Fences are rules that apply to rates. Meaning that to book a certain rate, there will be specific conditions that will apply to your reservation. There are different scenarios in which you can use Hotels use rate fences as part of their yield strategy and optimize their revenue results

High demand period
Low and medium period
Opaque channel fences
Distribution channel fences
Geographic fences
Group pricing Strategies

Remember it is all about outsmarting your competition. So, try to think of a stealth hotel pricing and revenue management strategy, which is not too transparent to the rest of the hotels in your market.