How do you optimize pricing for seasonal demand?

It's important to understand that you're not just pricing the hotel itself, but the entire guest experience. This means viewing demand not as a single unit but as a combination of factors, including the preference for certain room types, stay duration, packages, and more. It's crucial to identify demand patterns by such factors as they differ vastly versus the overall demand for the hotel.

It’s a cliche that pricing is an art and a science but today the best of technology to crunch data has to be coupled with deep brand positioning knowledge. A successful pricing policy is focused on the target market with a clear distribution strategy to boost conversion.

Forget competition if you have a somewhat unique offering. Pricing for services is a function of value added. Experiences, memories created, warmth, all of these are deeply personal and hence valued accordingly. Here are some rule of thumbs: - Small inventory, leisure, unique(ish) offering, go all out for rev management. Maximise peak. Keep pushing prices higher till you get push back. Keep an eye on reviews and referrals. If at your current price (for peak demand) gets you both of those very easily, you can charge more. - large inventory, business hotel, similar services as market - create long term loyalty and repeat business by ensuring some prices are always available. Business have hard budgets.

Optimizing pricing for seasonal demand involves analyzing historical data, market trends, and competitor pricing. Consider dynamic pricing, where prices adjust based on demand fluctuations. Also, offer limited-time promotions or discounts to incentivize purchases during off-peak periods. Regularly monitor and adjust your strategy to find the right balance between maximizing revenue and satisfying customers.

Incorporating dynamic pricing into your seasonal pricing strategy empowers your establishment to proactively respond to the challenges posed by seasonal demand fluctuations. By basing decisions on data-driven analysis, segmenting your market effectively, and making real-time adjustments, you can optimize pricing to not only maximize revenue but also enhance guest satisfaction and maintain a competitive edge. This dynamic approach ensures that your establishment thrives in the face of seasonal variations, reinforcing your position in the ever-competitive hospitality industry.

This is especially true when an establishment mastered the art of using data - from simple daily guest turnouts from any CSR booking platforms to inventory management systems. With the right data from a quarterly sales engineering report, it's easier to forecast revenues from one season to another. Managing a licensed independent restaurant here in Dubai can be tricky too, especially when you have an all-year available menu where you have limited opportunity to increase prices. However, seasonal set menus or specials can help add value and revenue every now and then.

Software makes this relatively easy to manage these days. However, even without dynamic pricing, you can look at previous years data and estimate room rates. However, this can leave you with less rooms sold or money on the table if others are using dynamic pricing and have lower early rates and higher last minute rates.

Always remember to price, at minimum, by room type, length of stay, and package. Even though the Revenue Management Systems are capable of pricing by multiple dimensions, the revenue managers often prefer a simpler method to pricing, which tends to be a single BAR rate for the day.

Sadly I see it as a more altruistic approach, Pricing must and should be ethical , of course it’s a function of demand and supply, but surge pricing is short term gain and very often bad value for experience. Pricing must be based on returns which are commensurate with investments. Fair return higher than what you would get on capital investment.

In the ever-changing field of hospitality, making prices right for different seasons needs a smart plan. Using my industry experience, I study past data, trends, and what competitors charge to make wise choices. By spotting busy and slow times, I create prices that earn more money while giving guests a good deal. I aim to find that sweet spot where our deals stay inviting and match how the market changes.

Shifting from hotel as just the lodge/room to rent into destination, particularly in leisure hotel is literally real methods of value-added to optimize the price. Guests enthusiastically experience attractively unique activities held by hotel team. And there's nothing more unique than cultural activities, such as: cooking class, traditional dance class, local language class etc. All the cultural activities should be daily performed to the guests very simple and for free. Therefore, after their staycation, the guests will bring home lasting impression instead of souvenirs, t-shirts, etc. Their enriched feeling reduce their objection about the room rate.

In my mind packages need to be driven by customer needs Having too many product offerings can confuse a consumer Flexible rate Room only Room with Breakfast Half Board Full Board Advance purchase Room only Room with Breakfast Half Board Full board Keep it minimal and fence product offerings so that they don’t confuse the consumer! Cost of distribution specially for Food and Beverage with their higher Variable cost implication needs to be kept in mind

It's a delicate balance when you want to offer value-added packages. As much as it is to increase the ADR, you have to look at the cost of the added value in the long run or the duration of the offer. Most hospitality establishments are not able to run with this for long.

Value-added package tent to compromise the room price; if not, it compromises the non-room price we bundled as one. This tactic might elevate the selling price and (perhaps) not maximize the room price.

One of the best use cases for rate fencing is protecting group rates. When you have a large group in-house at a higher rate than the market, you can often use rate fencing to tap into the transient market to fill the rest of your hotel while protecting the group rate.

It's also important to benchmark your own performance against the competitors, so you can clearly delineate the successes and failures of your own initiatives from the market conditions. There are established players in the market that provide these benchmark services, such as STR, HotStats, Kalibri Labs, and Demand 360.

Competitive analysis is still the champion in evaluating your performance; understanding the market penetration, price, and revenue generation indexes will significantly determine your market positioning. The pricing policy can be more clearly described by understanding the market positioning.

Here's an idea. Have an internal target of min revenue per night for different customer segments. Now get your operations team together and develop a ton of ideas to make that. Min revenue includes all revenue from the guest: room, F&B, other.

Competitive analysis is still the champion in evaluating your performance; understanding the market penetration, price, and revenue generation indexes will significantly determine your market positioning. The pricing policy can be more clearly described by understanding the market positioning. However, that alone is not complete if an analysis of the margin per room sold does not accompany it. To determine the margin per room sold, you must first calculate the fixed and variable costs per room sold. The conclusion is that pricing optimization must consider market positioning, revenue maximization, and margin per occupied room, all leading to elevating profitability.