7 Pricing Strategies for the Clever Hotelier

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7 Pricing Strategies for the Clever Hotelier

One of the easiest ways to grow sales and increase profitability is with smart pricing. But, how do you do it if you don’t employ a revenue manager and find yourself less than qualified in the area?


Revenue management is both an art and a science. You’ve to predict demand. Then optimise the price and availability of rooms to meet this demand such that it keeps you guests happy and business booming.

Easier said than done as pricing and availability can quickly become a complex web, especially given the dynamic environment of the modern hospitality industry. It can be a challenge even for the most seasoned operator as pricing can change not just day to day, but also hour to hour!

Knowing how important it is to get pricing right, in this blog we give you some tips to price your rooms so you can derive maximum value from them. You don’t need a revenue management degree to implement these!

Be at least as good as your competitors

Watch your nearest located competitors’ rates like a hawk (STAAH’s RateSTalk tool is a handy for this purpose). Next match what they have to offer in terms of room rate to win over ‘web surfers’ who are yet to make a booking. Another trick is to maintain your room rates but provide value-adds in the same bracket so you can maintain your average room rate (ARR), yet win over potential guests.

Win over the minds

$99 vs $100 may only be $1 lost, but it could mean revenue gains in terms of bookings gained. It’s one of the oldest tricks in the books – not limited to the hospitality industry – and one that keeps giving. Some call it psychological pricing. It’s definitely worth trying.

Address all segments

Set the price of your most basic room the same as the cheapest room in the market. Set pricing of other rooms the same as your closest competitors’ basic rooms. This will allow you to attract a wider diaspora of travellers.

Add-ons matter

Hotel room rates can be a ruthless war. To stay ahead whilst ensuring your bottom line is healthy, you need to be better than the rest in services you offer as an add-on. Not only will it help with revenue gains, add-ons can help increase the perceived value of your property and so guests don’t mind paying more for it.

Short promotional bursts

Drop your prices to attract more eyeballs to your property. Running such promotions from time to time for short bursts are good to get immediate traction but not advised as an ongoing deal due to its impact on the bottom line.

Know your guests

You may have the best price on the board, but it could be for the entirely wrong set of people. Make sure you understand your target audience, their needs, average stay, etc. so you can create prices and packages that best meet these needs.

Get the right technology

Smart pricing is a breeze if you have smart technology to help you along the way. Insights from your channel manager and property management system (PMS) can be a goldmine. Make sure you have these tools and use them to extract best pricing decisions for your property.


What pricing strategies have you found most successful for your property? Why do you think they worked? We’d love your inputs and views on marketing@staah.com.

This article was originally published by STAAH. For more hotelier tips, trends, and news please click here.