5 Intuitive ways to boost your hotel’s revenue through smarter pricing

Hotel revenue management

The right price! A never ending dilemma for all hoteliers; ‘Is the price too high? Are we losing out to the competition?” or “is the room tariff too low, are we losing out on revenue”.  It’s a catch 22 situation.

Big and multi chain hotels have an advantage with their revenue managers and software teams who help plan out the right pricing for their rooms, but what about the smaller hotels? What can they do?

Here are a few tips on how small hotels can use clever pricing strategies and increase their market share against other properties in the proximity.

  1. Do extensive surveys of the competition – When a hotel looks at their competition they must remember to compare apples with apples. The base category rooms of all hotels can be very different, so look at the room size, amenities offered, packages offered, and facilities available at the hotel etc.Hotels may also offer varied rates for the same room category based on what the cancellation policy of the room is i.e. refundable or non-refundable tariffs. Ensure that the market intel is comprehensive and up to date.


  1. Pricing should be at par with the completion – Hotels should ensure that their room rates are at par with the competition and that they don’t undersell, because then the hotel’s revenue would be impacted and at least one room category should be at the same price point as the competition. A hotel can recoup their revenue by pricing another room category at a slightly higher rate, and by adopting dynamic rate strategies.


  1. Psychological pricing – Yes it still works! All consumers know that there is barely any difference between $199 and $200 but studies still show that 60% of consumers are still drawn to the product which ends with a 9. Consumers will still go for the room which is sold at $199, $299 rather than $200, or $300. So don’t question the logic, just implement the pricing.


  1. Upsell your property – The hotel needs to increase their revenue but if the competition’s room rates are low; it can be a complete dilemma. Be a smart seller, don’t worry about increasing the tariff of the room but offer some more extras so that the price is justified. Late checkout, special discount on spa or F&B, some extra amenities etc. This is also a great opportunity to gain more revenue by upselling. A great guest experience is the key!


  1. Look at historical data objectively – Historical data is quite imperative for setting the right pricing. Hotels get a sense of which seasons are busy, which seasons are slow, how weather can affect room bookings etc. Hotels should ensure that during the busy seasons they price their rooms higher since demand would be higher than the supply, whereas on slower seasons the rates can be slightly lower.


Small hotels can ensure that they have a level playing field in the market, they just need to plan their strategies well and see what works best for them. We would love to hear on which pricing strategy worked best for you!


Neha Arya works as Writer and Communications Manager at Hotelogix, she is passionate about writing and working for the travel and hospitality industry. Born and brought up in Antwerp, Belgium she has been living in India for the past 17 years, you can drop her a line at neha.arya@hotelogix.com