How to Set the Right Pricing in Your Channel Manager: A Practical Guide for Hoteliers
Setting the right pricing for your hotel rooms is believed to be one of the most integral parts of running a successful hotel business. The correct pricing strategy will drive occupancy rates, boost revenue, and ensures that your hotel remains competitive in the market. However, arriving at the perfect price to set in your ChannelManager software is no tea party—after all, you do consider many other market forces and the competition. Through this blog, let me take you through the process of building pricing, key things you should consider before business tracking—post setting your pricing—to look out for competitors’ pricing.
1. How to Decide Pricing to Set in ChannelManager
Setting the right price at which to sell your rooms is a mix of understanding your costs, evaluating market demand, and knowing who your audience is. Here’s a step-by-step approach to setting the most effective pricing in your ChannelManager:
Know your costs
Pricing starts with ascertaining the cost of operation of your hotel. Calculate fixed costs-mortgage, utilities, and staff salary-and variable ones such as housekeeping and guest amenities. Your pricing should cover these costs and leave room for profit.
Mark the Demand of the Market
Research on the demand for hotel rooms in your area. Is there a high season when the demand is greater, such as holidays or local events? During these times, you can afford to set higher rates. On the contrary, during the off-seasons, you may have to reduce prices to ensure guests.
Know Your Audience
Consider the segment of customers you are going to attract. Are they going to be budget travelers, corporate people, or luxury seekers? The price needs to be conceptualized regarding the value proposition one is going to offer to one’s targeted customers.
Set a Base Rate
Determine a base rate that can help cover your costs and strengthen your brand positioning. This would form a basis from which further adjustments would be made based on real-time factors and competitor actions.
2. What To Consider Pre-hand
Before wrapping up the pricing strategy in Channel Manager, here are some of the major things that need to be considered:
Competitor Analysis
Check what kind of pricing strategy your competition is offering, specifically hotels with the same star rating, location, and amenity levels. This would help understand the market and put forward a competitive rate.
Local Events and Seasons
Consider all the upcoming events, festivals, and high seasons in your locality. The prices should be reasonably higher during high-demand periods and vice versa during low seasons, perhaps offering some discount to attract guests.
Occupancy Levels
Think of your occupancy rate at this time within the hotel. If the occupancy is low, you may be forced to reduce your prices enough to fill up the rooms. If occupancy is high, you can comfortably increase your prices to maximize your revenue.
Length of Stay
Pricing rules configured according to length of stay. Discounts offered for longer stays attract guests looking for an extended accommodation stay, thereby pushing up total revenues, while shorter stays might attract a higher rate to push up night revenues.
Booking Windows
Understand what the typical booking window for your guests is. For example, business travellers may book closer to their stay, while leisure travellers may book well in advance. Based on how far in advance a room is booked, adjust your pricing.
3. After Setting Up Pricing: What Needs to Be Looked Into
After you set your prices in the ChannelManager, that is just the beginning. You should constantly be on the lookout for changes in your rates, based on real-time data and trends. Here’s what you shall focus on:
Deliver Real-Time Occupancy Monitoring
Keep your finger on the pulse of occupancy. When rooms fill up quickly, raise your rates. If low, it may be time to revise the pricing strategy or promote special deals and packages to secure more bookings.
Guest Feedback and Reviews
Keep track of reviews from guests. If you are receiving complaints related to value-for-money, it might be the right time to reassess your pricing; similarly, positive feedback justifies keeping the rates the same or even higher.
OTA Performance Reports
Avail yourself of the performance reports made available by the OTAs to determine how your rooms are selling against the competition. Based on this data, you go ahead with the price adjustments if needed.
Special Offers/Discounts
Assess how any special offers or discounts perform. A promotion that does not secure bookings may need adjusting or substituted for a more attractive offer.
Market Conditions
Watch for shifts in market conditions. New entrants into the marketplace, changes in demand due to consumer travel, or a shift in the national economy can all impact your business. By taking control of your pricing in advance of such shifts, you’ll ensure that you stay competitive.
4. Competitor Pricing to Watch
Evidently, one of the most important external factors to consider when prices are concerned about competitors. The following are some ways in which you can be certain of what your competitors are doing:
Competitor Monitoring Regularly
Put in place regular checks on competitor pricing. Most ChannelManager systems contain competitor rate tracking tools that automate monitoring and comparing with your competitors’ rates.
Price Matching Strategies
Decide on whether to match, undercut, or go above competitors’ prices. A good example is that if the competitor lowers prices, you too can follow suit to keep pace or offer more premium features to justify the higher price.
Competitor Promotions
Know your competitors’ special deals and discounts. When they have some successful promotion, think about offering something similar or better for the guests.
Competitor Review Analysis
Analyze the reviews that come up about the competitors, showing what the guests say about pricing. If there’s a lot of friction from the guests about high pricing, this can be an opportunity for you to attract those guests toward you on the basis of a more fairly priced offer.
Conclusion
Setting the best pricing in your ChannelManager Software is a strategic process and needs insight into cost, demand in the market, competitor actions, and live performance updates. With a bit of understanding and continuous monitoring of these factors, along with a good pricing strategy, you can maximize the rate for increased occupancy and revenue. Remember one thing: pricing is not a one-time task; it is a continuous process that needs to be adjusted over time along with real-time data, market trends, and guest feedback. A good pricing strategy could be a strong impetus to the success of your hotel.
