For hoteliers, pricing can be a source of ongoing anxiety. Many ask themselves, “Should I raise my room rates or cut them?” What are my rivals doing, you ask? How will my price choices impact reservations? While there are no concrete answers to these queries, you can utilise tried-and-true pricing techniques to point you in the right direction. The control of yield management pricing strategy is an excellent place to begin.
What is a Yield Management System?
Involving a lot of information, figures, and calculations, yield management in hospitality industry can be time-consuming and challenging. Good execution is particularly challenging when resources are constrained. Operators of hotels seek assistance from devices including revenue management systems (RMS), rate shoppers, and channel managers.
A yield management pricing strategy like RateGain’s Pricing Intelligence Engine is one resource that is particularly well-liked by smaller hotels (PIE). PIE helps hotels save time by automating processes like data collecting, rate comparison, pricing, inventory control, and reporting. Hotels can establish policies and alerts to change pricing and stay limitations in response to variations in occupancy, competition activity, and market circumstances in order to optimise income. An intuitive dashboard that is integrated with the PMS and other major systems at your property shows all available tools and data.
5 Yield Management Strategies for Boosting Revenue
Let Data Guide Your Decisions
Set rates for the following year first. Examine the state of the market, historical demand, the rate of bookings, unrestricted demand, or the number of rooms you might sell with infinite supply. Keep an eye on the effects of your price choices and utilise them to inform future tactics.
Practice Dynamic Pricing
Static pricing is a bygone era. Using a variable pricing strategy, or raising rates when demand is high and dropping prices when demand is low, will help you earn more money. This covers changing rates based on the time of year (season) and the day of the week, during gatherings and events, and in reaction to alterations in occupancy and market circumstances.
Vary Your Pricing
Increase the price of your popular rooms that come with extra space, a wonderful view, a balcony, or the desired bed arrangement. Provide a selection of rate plans, such as non-refundable rates, packages, weekend rates, and rewards for direct bookings and longer stays, to cater to different traveller types and budgets.
Understand Your Market Mix
At different periods, certain market segments will be willing to pay varying prices. For instance, wholesalers make reservations months in advance and anticipate lower rates, whereas OTA distribution channels might be a reliable source for last-minute reservations. Keep track of which market segments are reserving which room types when, and modify rates as necessary.
Track Competitors’ Rates
In the same way that travellers compare prices, so should you. Make a decision regarding the pricing of your property in relation to your main rivals, or composite. Utilize rate shopping software for simple comparisons and pricing intelligence software to make sure your prices are always where you want them to be.
Yield management in hotel industry is essential for any hotel seeking to increase income. For precise and practical forecasting, it’s an essential pricing method. This is the best tool to utilise if you’re trying to strike a balance between availability and pricing, or between supply and demand.
RateGain can be useful if you’re trying to find hidden revenue sources. Their pre-arrival room renovations and additional ancillaries are part of their yield management pricing strategy.