Room pricing has always been a very interesting topic for me, as both a former innkeeper and now inn broker and consultant working with innkeepers.
I’ve always discussed with my clients pricing and perceived value and this article addresses just that. If you drop your prices too low, you also chance dropping the overall perception of value you provide. Here’s the article in part:
“Don’t Get Dragged Into the Price War
A lot of the traditional independent hotels under pressure from stakeholders have turned to price-level competition. When your biggest USP is your price, then that is all that you will be judged on. A lower room rate becomes your only significant offering. But the guest you are targeting has a goal: to keep searching the internet for an ever lower rate.
Pricing is a shortsighted play. If you are looking for long-term profitability, you need to look at the value your are providing to your guests. Taking the time to educate your guests can make all the difference in value perception, allowing you to charge more for your rooms.
Better Perception = Better Price = Better Profits.”
Read the full article here.