The hoteliers want to make a profit from the peak season and do not want their business to go down in the low season so they have a seasonal pricing strategy.
The process to set the price, and offering any kind of discount in peak season or in low season is called the seasonal pricing strategy.
Seasonal pricing is considering how much rates can vary between times of high and low demand. Therefore, seasonal pricing is an essential component of generating profit for your hospitality business.
The most crucial and fundamental pricing plan that any hotelier should consider to increase income is the seasonal pricing strategy.
Hoteliers must understand the significance of pricing in the hospitality sector in order to survive and expand.
The simple answer to the issue is that you must establish a price strategy. If you don’t want to lose your clients and the competition in the market.
A seasonal pricing strategy for hotels will boost your business’s total profitability and also increase the Average daily rate(ADR) and Revenue per available room(RevPAR).
So now the question here is how you will manage your personal pricing strategy for hotels. Now we will discuss the methods of how to plan the hotel’s seasonal pricing.
For making and fixing the seasonal pricing of your hotel room you should know how you are going to do it. Also, what will be the max and minimum price you will fix for your hotel room during the season
Let’s discuss each method step by step:
Before going to plan any pricing it is essential that you should know what is the time of your peak season.
For this check out our last year’s data. From this data see when you are getting the surplus customers for room booking.
On which dates and months the number of customers is high and when there is a shortage of rooms.
So these dates and time period is your location’s peak season and the demand is high for hotel room booking.
You can get the serious years data from your CRM too. That will also show you the analysis for your customer trend i.e when the customers are high and when they are low.
Base price is the price you charge for your hotel room during another time period(apart from the season) of your hotel.
In another way, it is the minimum basic price of your room that you will charge. The price below the minimum base price shall not be advisable to consider for the room base price.
The parameter to be taken care of while fixing the base price are the following:
- How much money you are spending on room maintenance?
- What is your room type? How do you fix the price for each room type?
- What amenities the customer will get in the hotel during the stay? For example gym, parking, gaming room and etc.
- Most importantly, how much do your competitors charge? Are they offering something extra other than you?
- How much profit do you aim for?
- Also, know your customer pocket, and how much they can pay easily for the room booking.
The base price is important to fix properly. Because then only you can make the price strategy over the base price.
Once your basic price is fixed then you can strategize your seasonal price. Seasonal price is directly proportional to the demand.
There are two ways upon which you can make your price strategy. It can be for a short period or a long period.
A short period is a price strategy that exists for a week or any specific date. Let’s understand in this way that there is any off on Friday or Monday.
So many people will go towards the nearest tourist spot. So, the hotel room demand will be high for these 3-4 days. Therefore, the hotelier can raise the price during this short period accordingly.
The long period strategy is done when there is a long season change. Like for hill stations during the snowfall season the room demand is high.
And during the summer school break on the hill station room demand is high. This scenario continues for 30 to 40 days.
Each hotelier has flexibility in how much percent they want to raise the price over the base price during the season.
Once the hotelier fixes the basic room price and the season price( how much they will increase on base price) then the hotelier can plan for the shoulder season too.
Shoulder season: The season or a few days before the peak season is called shoulder season.
Once the basic price is set you can easily set the price that what you are offering extra during the peak season and shoulder season so the price will increase.
For example, during the peak season, the hotel room price is $180
So during the off-season, the hotel price is $100.
and during the shoulder season is $130.
Hence you can make the hotel room pricing strategically for the season.
Now the question is what happens if anyone book 4 room in the hotel during the peak season and cancel it? So for this, the hotelier must have a cancelation policy.
A cancelation policy is vital for any hotel. This carries the rules and regulations that need to be followed while cancelation of any bookings.
Let’s understand in this way. Suppose any person books 5 rooms for 4 nights and 3 days during the peak season and cancels it before one day. Then we have to do the refund to the customer.
This will result in the hotel’s loss. So to cure this problem the hotel must have a cancelation policy.
The cancelation policy has before how many days of stay the customer can cancel the booking and how much he will charge for the booking cancelation.
So this will reduce the number of cancelations and protect the hotel from loss.
This was all from the Seasonal Pricing Strategy For Hotel. I hope you liked the article.
If you want to learn about the functionality of QloApps then you can visit this link: QLO Reservation System – Free Open-Source Hotel Booking & Reservation System.
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