Flexible pricing for hotels, bed and breakfasts, and boutiques refers to a pricing strategy where room rates can vary based on different factors such as demand, seasonality, occupancy levels, and booking patterns.
Instead of offering a fixed price for rooms, it is wise for hotels to adopt flexible pricing and adjust their rates dynamically to optimise revenue and maximise occupancy. In this article we will look at the reasons for flexible pricing in more detail.
Why Adopt Flexible Pricing?
Flexible pricing is crucial for hotels for several reasons:
- Maximising Revenue: Flexible pricing allows hotels to adapt their rates based on demand fluctuations, seasonal variations, and market conditions. By adjusting prices dynamically, your hotel can optimise revenue and capture higher rates during periods of high demand while remaining competitive during slower periods.
- Demand Management: Flexibility in pricing enables hotels to manage demand effectively. During high-demand periods, such as holidays or special events, your hotel can increase prices to capitalise on the increased demand. Conversely, during low-demand periods, you can lower prices to attract more bookings and maintain occupancy levels.
- Competitive Advantage: Flexible pricing strategies help hotels stay competitive in the market. By monitoring competitors’ rates and adjusting your own prices accordingly, your hotel can position itself attractively and capture market share. This is especially important in today’s highly competitive hospitality industry, where consumers actively compare prices before making bookings.
- Revenue Optimisation: Hotels can utilise flexible pricing to optimise revenue from different customer segments. By offering various rate plans, such as advance purchase rates, non-refundable rates, or discounted rates for extended stays, your hotel can cater to different customer preferences and capture a broader range of guests.
- Demand Forecasting: Flexible pricing practices provide hotels with valuable insights into demand patterns and customer behaviour. By analysing historical data and pricing trends, you can make informed decisions about rate adjustments, marketing campaigns, and inventory management, ultimately improving your overall revenue management strategies.
- Promotions and Packages: Flexible pricing allows hotels to create attractive promotions and packages tailored to specific customer segments. By bundling services, amenities, or add-ons at discounted rates, you can enhance the perceived value for guests and incentivise bookings, leading to increased revenue and customer satisfaction.
Granting Rate Management Wishes
At Guestroom Genie we understand the importance of flexible pricing and offer rate management functions to support your business to make changes quickly and simply from a central system.
We offer:
- Rate adjustments based on days of the week
Customers understand that hotel pricing varies based on demand. To optimise your bookings, you can consider adjusting your rates accordingly. For instance, you may notice increased business on weekends, allowing you to set your rates 10% higher during those days. Conversely, to attract more guests on Wednesdays, you can offer a discount of £20. If your property appeals to corporate travelers, monitoring occupancy trends will help you fine-tune your weekday and weekend rates effortlessly. This way, you can easily adapt your pricing strategy, maximising your business potential at the click of a button - Seasonal rate alterations
During certain times of the year, such as school summer holidays or annual events/festivals, guests anticipate higher prices. It’s important to consider adjusting your rates accordingly. On the other hand, during periods that typically experience lower demand, offering discounted pricing or special promotions can help increase occupancy. By strategically varying your pricing and offering attractive deals, you can effectively manage customer expectations and encourage higher bookings throughout the calendar year. - Occupancy-based alterations
To cater to different guest scenarios, you might consider adjusting your room pricing based on the number of occupants. For example, you can set lower prices for single occupancy and higher prices for triple occupancy in a double room. This flexible pricing approach allows you to accommodate varying guest preferences and optimise your revenue based on the specific room occupancy. - Channel-based alterations
You may consider adjusting your room rates based on the specific distribution channels through which the bookings are made. For example, you may wish to offer a direct booking discount, or charge guests an extra fee for booking via Expedia due to their higher commission, etc. - Minimum/Maximum length of stay alterations
You may choose to implement different minimum or maximum length of stay requirements for guests depending on the specific day of the week they arrive at your hotel, e.g., if a guest checks in on a Friday, they are required to stay for the whole weekend.
With Guestroom Genie you will experience a quality property management and reservation system that will help to drive profitability through flexible pricing.
Contact us today on 0114 209 4050 to discuss what we can do for you.
