How to scare away potential vacation and hotel guests with your rates.

Do you know what a rate sheet is, what rack rate means, yield or revenue management? No?

You're not alone there. It's international hotel lingo and the basis for hotel sales.

Rates attract guests or scare them away. It's very quick and very easy.

So how did your price, your rate, come about? Is it calculated based on the GOP? Or did you take a peek at your neighbours and then add or subtract something, or has your price always developed in this way over the years, with long-time regulars paying the price of 6 years ago?

Everything used to be simple.?

Guests called, you typed a little something on the calculator or knew the price by heart and gave it through on the phone. You also advised the guest on the right room category. At best, the guest booked at the end of the conversation. Later, this was drawn out by fax and email in a mostly unnecessary ping-pong game. Did you also spend a lot of time doing this, or do you still work this way today, even though you can hardly provide staff for it?

Because today it's all different.?

Travellers are digital, they want to do everything themselves, quickly and easily, without much searching. Potential guests often skim your website in 10 seconds and make a decision. For you, a competitor or in the worst case for an online travel agent such as booking or Expedia. This then costs you between 60% and 80% of your GOP. And if you are one of those hotels where the prices on the booking platforms are also cheaper than on your own website, on the phone or at the front desk, then you are actively losing money with every guest.

We see many hosts and their historical pricing structures, rates, room categories, seasons that have become more and more complicated over the years. It's too much for a guest who wants to book online with you.?

Often the prices of the seasons differ by maybe only € 5, there are 15 different room categories and prices in a property with 20 rooms. Sometimes prices are per room, then again per person or for 2 people and the 3-4 people charged a little less. Also we saw prices for 1-2 days and 3-4 days etc.

All this makes it unnecessarily burdensome. Not only for you, the sales department and the reception. No, it is especially hard for the guests. Because the guest can only see through all this with effort and a lot of time, or simply leaves it and books somewhere else.

And that is exactly the problem.?

The potential guest spends about 10 seconds on a website. In this time they must grasp what is relevant for them. If that doesn't succeed, they click away and never come back.

You can also say that if you make the guest think, you have lost him.?

Because in 10 seconds, the guest cannot grasp the variety of options, prices, categories, seasons, etc. They are overwhelmed by the complexity and never come back.?

It is therefore time to adapt the price structure, price categories, seasons, room types and more to the digital age, to streamline and simplify. This also helps your own organisation and calculation.

But it especially helps the guest to choose you as a host.

A simple and clear pricing strategy, also adapted to the international standard, therefore manages to increase the number of bookings on your own website.

This way you will get a better occupancy and a higher turnover as well as more profit. And all this without any commissions to the platforms.

From March 2022 to August 2022, we improved ADR (Average Daily Rate) at one hotel by 27% compared to 2021, by 20% compared to 2020, and still by 7% compared to 2019. And this with lower demand and occupancy. As a result, room supply costs have also decreased and profits have increased significantly.

With more than 20 years of experience in the international hotel and tourism industry, our specialists will work with you to create a perfect pricing and distribution strategy for your Hotel and your new economically sustainable future.

Request our free rate calculator now to see what potential your home has in terms of improved ADR and occupancy.