How do you use competitor analysis and market research to inform your pricing decisions?

1 Know your value proposition

The first step in pricing strategy is to understand your value proposition, or what makes your hospitality business unique and desirable to your target market. Your value proposition should reflect your brand identity, your customer segments, your location, your amenities, and your quality standards. It should also communicate how you solve your customers' problems, meet their needs, and exceed their expectations. Your value proposition will help you determine your pricing objectives, such as increasing occupancy, boosting loyalty, or enhancing reputation.

2 Analyze your competitors

The next step in pricing strategy is to analyze your competitors, or the other hospitality businesses that offer similar or substitute services and products to your target market. You should identify who your direct and indirect competitors are, what their value propositions are, how they price their services and products, and how they perform in terms of occupancy, revenue, and customer satisfaction. You should also monitor their pricing strategies, such as discounts, promotions, or dynamic pricing, and how they respond to changes in demand, supply, or seasonality. Competitor analysis will help you benchmark your prices, identify your competitive advantages and disadvantages, and spot opportunities and threats in the market.

3 Research your market

The third step in pricing strategy is to research your market, or the external factors that influence the demand and supply of your services and products. You should collect and analyze data on your market size, growth, trends, and segments, as well as the economic, social, cultural, and environmental factors that affect your customers' behavior, preferences, and willingness to pay. You should also gather feedback from your existing and potential customers, such as through surveys, reviews, or focus groups, to understand their perceptions, expectations, and satisfaction with your services and products. Market research will help you estimate your demand curve, segment your customers, and tailor your prices to different customer groups and situations.

4 Choose your pricing method

The fourth step in pricing strategy is to choose your pricing method, or the approach that you use to calculate your prices based on your costs, your value, or your competition. There are different pricing methods that you can use, such as cost-based, value-based, or competition-based pricing, or a combination of them. You should consider the advantages and disadvantages of each method, as well as your pricing objectives, your value proposition, your competitor analysis, and your market research, to select the most suitable method for your hospitality business. Your pricing method will help you set your base prices, or the standard prices that you charge for your services and products.

5 Implement your pricing strategy

The fifth step in pricing strategy is to implement your pricing strategy, or the actions that you take to communicate, adjust, and monitor your prices in the market. You should consider the best ways to communicate your prices to your customers, such as through your website, your social media, or your distribution channels, and how to convey your value proposition and justify your prices. You should also consider the best ways to adjust your prices according to changes in demand, supply, or competition, such as through dynamic pricing, price discrimination, or price bundling, and how to optimize your revenue and profitability. You should also consider the best ways to monitor your prices and their impact on your performance, such as through revenue management, key performance indicators, or customer feedback, and how to evaluate and improve your pricing strategy.

6 Learn from best practices

The sixth and final step in pricing strategy is to learn from best practices , or the examples and insights from other successful hospitality businesses that have implemented effective pricing strategies. You should look for case studies, reports, or articles that showcase how other hospitality businesses have used competitor analysis and market research to inform their pricing decisions, and how they have achieved their pricing objectives and outcomes. You should also look for tips, advice, or recommendations from experts, consultants, or associations that specialize in pricing strategy in hospitality, and how they can help you develop and implement your own pricing strategy. Learning from best practices will help you gain inspiration, motivation, and guidance for your pricing strategy in hospitality.