Can you provide more value than your competitors? Can the consumers clearly understand the reasons that they would pay more staying in your hotel? What are the consumers ready to pay for?

Setting different prices

The graph shows some reasons for having different approaches to pricing (GOPPAR means gross operating profit per room):

Yield management in hotels works best when you can target different types of clients at any given time with different prices.

If you have not priced rooms for clients who potentially have a higher budget range and your prices are too low you will lose profit margin, likewise if you price too high you may also lose business.

This basically means we are introducing a price segmentation strategy.

So we have determined that we need more than one rate. So how many rates should we offer? How can we sell multiple rates for our hotel at the same time?

You can develop a pricing grid with room products with different benefits and characteristics.

Products are a combination of price and value. Developing different products enables you to target different type of clients with different needs.

  • Sell more than one room type
  • Create value differences between them
  • Detail the pricing matrix for all the room types
  • Ensure clear differentiation through your room type descriptions in your distribution systems

> Continue to Price grid

Revenue management

Goal and mission 
Market segmentation 
Pricing and rates 

- Rate parity
- Price strategy 
- Price segmentation 
- Pricing grid
Budgets, forecasting and a demand calendar 
Capacity allocation 
IT / Analysis support tools