Guide with essential information for setting rates for your hotel
There are many factors to consider when setting up your rates and choosing a pricing strategy that will help you maximize your occupancy and succeed.
This guide has all the essential information you need to get started: from setting your base rate to using more personalized pricing products and proactive solutions to generate more bookings. We’ve also included answers to some of the most common questions you may have as you create your pricing set.
1. Rates
Different travelers have different needs, especially in periods of uncertainty like the one we’re experiencing now. Some prefer to plan ahead and want to secure a good price in advance.
Others are willing to pay a little more if they need to change their travel plans. There are also those who tend to book at the last minute and don’t need the extra flexibility.
Establishing a solid base of rates can help you attract diverse travelers and secure more bookings.
Here are some basics to keep in mind when choosing your rates:
- Think about the costs you have with each day a customer stays in one of your rooms and units.
- ased on this, calculate your preferred rate.
- Consider adjusting your rates when public events in your area – such as fairs, soccer matches, concerts or sports tournaments – increase demand.
- Setting more attractive rates on weekdays can help you fill rooms or units that might otherwise be empty.
- Adjust your rates according to the high and low season demand in your region.
- This data can help you consider the rates of other, similar properties in your area and find ways to attract more bookings.
- If your occupancy is lower than you’d like it to be, consider adjusting your rates to make them more attractive to travelers visiting your area.
Review your rates regularly to see what’s working well and how you can adapt to increase your property’s occupancy and revenue over time.
2. Rate plans
One of the first steps you take is to choose your rate plans, which make up a series of basic elements of a booking. We offer 3 rate plans and our data shows that if a property has activated all 3 plans, it will see, on average, a 5% increase in bookings and 11% increase in visibility, as well as a 9% reduction in cancellations.
In addition, any other opportunity you activate will be more efficient if you have already adopted at least 2 rate plans.
We offer 3 rate plans. Flexible, non-refundable and early booking. We recommend that you use some of these options to optimize your set of rate plans and attract a wider variety of clients.
Doing so can also help you get more bookings in advance, reduce cancellations and minimize the need to offer big last-minute discounts to fill rooms or units.
The basic elements of a reservation that are part of all our rate plans are:
- Cancellation policy
- Price
- Number of days between booking and check-in
- Length of stay
- Room or type of unit
- als, if offered
a. Fully flexible pricing
A fully flexible rate plan gives travelers more freedom if they change their plans. Travelers are willing to pay more for the extra peace of mind. So these rates tend to be the most expensive, as well as generating more bookings.
To find out how to set up a fully flexible rate, check out this article.
b. Non-refundable rate
A non-refundable rate plan helps you secure more bookings and revenue, and can attract travelers looking for the best value for money. This is because these rates are usually lower than fully flexible ones, but in general they can increase bookings by up to 5% and reduce cancellations by at least 9% on average.
c. Early booking fee
An advance booking rate plan helps you attract travelers who prefer to plan ahead. These rates tend to be the cheapest, but can help you secure more bookings in advance. They also tend to reduce cancellations, as guests are more committed to the booking. You can combine them with cancellation terms or a non-refundable policy.
d. Weekly and monthly rates
One of the best ways to have more revenue stability and reduce workload is to make your property more attractive to customers who want to stay longer. To offer discounts, you can set up a weekly rate (stays of 7 nights or more) and a monthly rate (stays of 28 nights or more).
3. Rates for children
Using child rates can help you attract a very lucrative market: families. We’ve also improved the way we configure and display rooms and units on our platform. With child rates, this makes it easier to attract families and group travelers.
4. Cancellation policies
Now, more than ever, there is a need for more flexibility. People want to continue dreaming and planning trips for the future, as well as feeling confident that their bookings are flexible enough to adapt to circumstances.
Our research reveals that while convenience and variety remain important to travelers, what matters most now is flexibility and a good price. At the same time, you’ve told us that increasing occupancy remains one of your main needs, especially in this challenging period.
The fully flexible rate plan offers the greatest flexibility, attracting travelers willing to pay more for greater freedom. The non-refundable rate plan offers the least flexibility. Because these rates are generally lower than the fully flexible ones, they tend to be more visible to travelers looking for the best value for money.
5. Price based on occupation
Occupancy-based pricing can help you receive more bookings, increase your position in relation to the competition and your visibility, as it gives you more flexibility in how you display the possible occupancy of your rooms or units.
If you only have one price set for each room or unit – based on the maximum occupancy of each – you could be missing out on bookings from groups of different sizes that could still be accommodated in that room or unit. Our data shows that setting prices based on occupancy attracts an average of 30 bookings a year.
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