Accurate Pricing Strategy and how to set the right price
Accurate Pricing Strategy and how to set the right price

Accurate Pricing Strategy and how to set the right price

Should prices go down or remain the same. Key questions every stakeholder should ask are how can I make a profitable agreement? Or how can I ensure that the different pricing components won’t destroy our profit margin?


Companies want to develop their pricing strategy and model to drive growth and profitability. In order to support this idea the company needs a tool that can efficiently manage pricing and analyze the profitability. The tool should make the work of the sales and other important stakeholders easier.

The trends that impacted the pricing before Covid19 were :

  • Seasonality;
  • City wide and annual events;
  • BAR rate parity and alignment to the CompSet retail rates;
  • The discount of qualified segments;
  • Run of House pricing;
  • Strive for volume or market share;
  • Limited inventory allocation at the lowest rate for entry category;
  • Premium paid rooms supplement;
  • Supplement growth for additional person

But what are the threats that every hotel or lodging unit face: 

  • Economic downturns
  • Currency fluctuations
  • Political turbulence
  • Industry disruptors (AirBNB, Google, Facebook, Amazon and its copycats)
  • OTAs advantage over the brand.com and FIT.
  • Commission and transaction fees, taxation
  • Rate flexibility - chain vs. non chain hotels
  • Payment options – hotel collect vs OTA collect; cash or virtual cards; authorised credit card payments vs fraud transactions
  • Contracts; Special Deals; Offers

So what are the opportunities every hotel can benefit or target? Let’s review some of them:

  • Embrace the Change - Belt-tightening among business and consumers by “investing” mainly into Digital Marketing
  • Duopoly – competing for the same customer
  • Old and New markets – setting the destination based rate
  • Rational pricing - Moving away from the Channel “mindset” to Guest experience irrespective of the source of booking
  • Score and ranking - Content Score; Photo Score; Performance Score; Visibility Boosters; Loyalty programs
  • Rate plans, deals and offers- Book Now and Save (Pay Later); Stay and Pay; Prepay and Save; Advance Refundable; Prepaid Nonrefundable; Partial Refundable
  • Contract the Uncontracted OTAs – resell the rooms to OTAs with no direct contract; Good Guys (B.com; EX) and Bad Guys (Agoda % off with enrollments; Booking.com Basics) – Watch it out!
  • Pricing – Dynamic or Static;
  • New Normal Approach – Sales Tips and Techniques
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The New Normal period will bring its novelty to the Hospitality and Travel Industry. Nevertheless for accurate pricing the aforementioned highlights would keep its adequacy and application with some adjustments and adhere to the new rules and tendencies.