👉 The strategy and process of setting room rates to optimise revenue based on market demand, competition, and other factors. Pricing strategy is more than just numbers: it’s about understanding the market, demand, and your guest to maximise revenue.
📊 What is pricing?
Pricing refers to determining the right room rates to balance occupancy and profitability. It takes into account demand trends, competitor rates, special events, seasonality, and customer segments to adjust prices dynamically or periodically. Strategies for setting and adjusting room rates
🧮 Key factors that influence pricing
- Market demand and supply
- Competitor pricing
- Seasonality and special events
- Customer segments and booking channels
- Costs and profit goals
✅ Importance of pricing
- Directly impacts hotel revenue and profitability.
- Helps position the hotel competitively in the market.
- Encourages bookings by adjusting to customer willingness to pay.
- Supports revenue management objectives.
📘 Practical pricing example
A hotel raises room rates during a local festival to capture higher demand and lowers rates in quieter months to maintain occupancy.
Differences between Revenue Management, Yield Management and Pricing
Although often used interchangeably, Revenue Management, Yield Management, and Pricing are not the same.
- Revenue Management is the broadest concept: it involves data, strategy, demand, segmentation, and technology to maximise a hotel’s total revenue — not just room sales.
- Yield Management is a narrower subset: it focuses on optimising occupancy and average rate to maximise revenue per available room at a specific point in time.
- Finally, Pricing is the tactic: it refers to setting prices, either manually or through algorithms, for each segment, channel, or situation.
→ In short: Pricing executes, Yield optimises, Revenue leads.
