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Question of the Week: Pricing strategy for your property. How do you pick one?

For those renting their property for the first time, it can be extremely difficult to decide on a listing price. 

For example, do you look at comparable properties in your area? Do you take into account your facilities and furnishings? Do you offer a weekly discount, or do you increase your rates over the weekend? What about special events?

If you've got a pricing method, share with the community in the comments below!

37 Replies

3
Corinne Orde

Royal Clarence, this sounds even more complicated than our UK railway pricing and ticketing system!

Being new to this game, I'm at the complete opposite extreme. Two rates only: a high-season rate from May until end of September, and a slightly lower one for all other times. All days of the week exactly the same. Weekends and bank holidays just the same. I consider my prices to be quite high, but I have more than enough bookings. I chose round numbers for the prices to avoid having to give change at checkout time, but in fact the vast majority of guests pay by card. When I started the B&B at the beginning of May, I had a special deal of stay 3 nights and get a 4th one free, but it proved too popular so I removed it. It was good at the beginning to attract my first clients and get some reviews, but now there's no point in it. The only concessions I make is to give a tiny discount for multiple nights (i.e. two or more) and also to guests on business who need to stay one or two nights every week (I do have one of those at the moment), in which case I negotiate a special deal with them with a fairly large discount.

10 months ago
1
Info

I'm in Australia: Bank holidays, Easter, school holidays and Christmas New Year is when our prices are high as that is where we derive our income from.Minimum stay is from 4-7 nights depending on the season.

Lower prices from May - July, excluding school holidays, so that the months get filled up. When I had the prices higher, the bookings were slow. Minimum nights are 4.

The rest of the time, I watch what is going on around me. We have a themed house which helps - The Bali Hut on Water - as people like the peace and quiet, private style house.

10 months ago
2
Malapascuabudgetinn

Great learning from all of you guys.

In my case I set up a standard rates for the whole year round. But I increased prices on certain dates where there is demand and less supply. I made adjustments already for dates like chinese new year, summer time, holy week and other holiday and important events and long weekends.

I also check on the booking behaviors of my clients. I have noticed they booked usually during the day of check in. So to attract guests to book at my hostel I give discounts and lower the rates of same day bookings but the rest of the nights are actually standard rate. It’s how I catch fishes in the ocean haha.

I keep tracking also of competitors activity if they have a lot of bookings during that day. That way I would understand my sales in general.

I just don’t lower my prices just because the other competitors are super low. I know my standards and what we offer compared to other hostels. Knowing my worth and what we offer makes us confident in making such prices : aircon dorms, free movie nights with free pop corn, high quality and charming staff, clean and organized, and well maintained facilities.

Poor pricing means poor maintenance and low quality staff. Simple logic - you have to consider the operation cost to make your business well functioning. If you sacrifice the price way below the standards that means sacrificing some expenses that are vital in hotel functions.

Plus I also consider mg ratings over other low price competitors. If mine is 8.3 rating with $8 per night (aircon dorm) vs 7.4 ratings with $5 per night (fan room) - the number would speak for itself. We are not cheap and we have standards hehe

10 months ago
2
Malapascuabudgetinn

And yes having a property management system really helps a lot. I only pay $100 dollars a month and oops I am saved from overbookings. And it’s easy to update pricing and availability - it’s just one click away and it will update the whole system. It’s a smart idea to have it esp if you have plenty of rooms.

10 months ago
6
Bandara Hotels…

@Laura Nice topic.

Of courses we are using your Rate intelligence system to be our guideline. Which is free and friendly to use.

10 months ago
6
Bandara Hotels…

Apart from Revenue system, for some of our hotel we are not base on any Revenue system. We just look at our occupancy and demand for hotel and we yield rate several time of the day during high demand. Even USD 1, 2, 5 we also yield all to maximize our revenue as much as possible.

In the same way, if our occupancy is low, we also launch last minute strong discount or same day discount to push production.

10 months ago
1
Naturalhousevn

Please help me how to adjust the price of 1 bedroom with 12 beds to the price of each of bed in a 12 beds-bedroom! Thanks a lot. NATURAL HOUSE hostel

10 months ago
2
Dr. Hanaa Attia

I don't know how to add a photo here..Can anyone help...THANKS

10 months ago
2
Dr. Hanaa Attia

THANKS again ...as I was writing from my Mobile...of course it is not shown..I have to deal though my lab top ....Thanks

10 months ago
7
Katerinka12

"You would be amazed how many people look for hotels who have forgotten to take advantage of a busy event nearby and are charging low rates."

That's very important! And you will be surprised, that these people can book months ahead.

Our strategy is simple, but so far effective. We have normal rates on weekdays, and weekend and holiday rates. If there are days with no bookings, we start promotion with discount from 8 till 11 pm the same day. Last minute or basic discount works great. I check pricing at 11 am, 3pm and 8pm.

I monitor "competitors" several times a day, however, it's not for pricing, but for availability. Since we are located just across the airport, sometimes the demand is very high. Instead of saying no to the client, at least we can offer him alternative room. In such situation everyone is happy.

10 months ago
8
Leandri Klopper

Hey all,

I enjoyed reading everyone's strategies. Very learnsome.

I'm probably going to drop a few jaws here with my following statement, last time I mentioned it I got quite the reaction.

So, I've loaded 4 of our properties onto booking.com... and I manage the calendars Manually. Jep, that's right. No Channel Manager. (Yes, the properties are loaded on other platforms also).

This takes much time, but I can mirco manage the availability to an almost surgical point.
For instance, every Monday the prices for the following weekend gets dropped, and sometimes I even drop the following week's rates a bit because I also believe that getting a little something out is better than looking at the empty chalet and wondering why the cleaning staff is being paid to dust it if no one used it. It's like looking at money disappearing.

Dropping with a Small amount sometimes makes the world of difference, and other times dropping it with a huge amount is all that works. It's a constantly engaging method I'm using and it's very stimulating but I know it's not going to be do-able for much longer.

Sometimes I'm currently playing with is: closing today's rooms if I haven't received bookings for it yet. Then Booking.com doesn't register it as Not Sold, they register that it was closed or assume it was booked on another platform. Which helps with the performance of the property... and dropping the price a week at a time, brings in those last minute bookings.

When it comes to actual rates... I have set rates for the Peak and Off Peak seasons, but I do like playing with it on a weekly and monthly basis based on demand. It won't work for everyone, but I like it.

Keep well all!

10 months ago
2
Shirtsandsigns

Put yourself in the position of a guest before they book.

Type into Google "accomodation" and the name of your district. See what potential guests see. Choose an accomodation provider with similar facilities to yours, a guest might book with them, or with you. You need to set your price the same or just below your competition. If you need a higher price then you will need to improve your property and facilities.

10 months ago
7
Katerinka12

Hi Leandri,

You wrote:

"Sometimes I'm currently playing with is: closing today's rooms if I haven't received bookings for it yet. Then Booking.com doesn't register it as Not Sold, they register that it was closed or assume it was booked on another platform. Which helps with the performance of the property... and dropping the price a week at a time, brings in those last minute bookings."

Can you please explain more? Will that show my place higher in search? Or how exactly we can perform better, if we close rooms manually?

10 months ago
3
Eugenia Ruabur…

I allow flexibility on my rental prices. Off Peak & Peak Season. But I provided a special rate for the empty beds regardless of the season is.

10 months ago
7
Katerinka12

Mabuhay Eugenia

What do you mean empty beds? There should no empty beds!

10 months ago
2
Lucky Pete

We set one day in the year very low for all 4 our apartments that way we appear much cheaper than our competitors when they search. When they put in their dates the actual rates apply for that period.

10 months ago
1
Corkshoppe

we view pricing our property 3 times a day. but we set our pricing a year in advance based on this years occupancy, if we run better the 70%, then for sure we will raise our rates. we don't look at our local competetion, because its a fact, when one is busy everyone is busy, and vice versa. good luck!

10 months ago
1
Camille Flores

What to do if you are in a serviced apartment business model, wherein you doesn't own the units. Your hands are held tight in increasing the rates as you may push the business away. And at the same time cannot lower than the rates to compete with your compset, as you have unit owners who expects high revenue for their units.

10 months ago
1
Anna Villa Col…

Hello and what do do at the begining? how to bring guest ? What kind of offerts do you suggest to do for a new struture?

10 months ago
3
Weigelt

Check the price of neighboring establishments. Don't go much higher or lower than these places.

10 months ago
3
Eugenia Ruabur…

I do not compare my rates to other neighbouring establishments. I believe in my Self Catering Services and have self confident. If I see that the market is slow or I have some empty rooms, only then I adjust my rates.

10 months ago
3
Eugenia Ruabur…

In all my years in business since I was 13 years old, I did not know that I was practising the Law of Supply & Demand. Only then in my Adulthood that this practice is very much applicable to any business entity. Believe in yourself .

10 months ago
7
Katerinka12

"Check the price of neighboring establishments. Don't go much higher or lower than these places."

I think it's another topic for discussion. I think Eugenia's strategy is a good one. We do discuss here the Strategy, not what shall we do if the demand is low.

In pricing everything matters: interior design, furnitures, size of the property, better location, better building and amenities. My apartments have dedicated personal manager (in other countries people will pay a lot for it). And why not to charge higher, if you are a Superhost and have excellent reviews? And how about late check in, breakfast and other add ons?

10 months ago
9
M Adamopoulou

I set up standard rates all year round and make discounts at low season or weekly reservations

10 months ago
3
Akwador

Our prices are based on the fact we have the only sea view in the town, (the three other hotels face the wrong way!), we have the best reviews (that is something we strive to keep - by being the 'best', there are no short cuts), we are the only accommodation that gives each guest a welcome tour of their room, the facilities and tips on where to go - plus a guide on the town and where shops and restaurants are. This can take 10 minutes to sometimes half an hour per guest but it makes us unique. One of the competition provides a key code and the guest arrives to an empty building, uses their code to enter and finds their room - other than a welcoming fruit bowl, it is a rather cold way to greet a guest in our opinion - albeit efficient.

Saying all that, we have limitations over other bigger establishments that have on-site restaurants and a swimming pool so we need to be aware that we cannot out price those places with better facilities. We therefore set our rate and adjust UPWARDS by monitoring the opposition who are all higher than us because of these better facilities. If they put their rates higher by €10 - so do we, we therefore keep competitive but take advantage of closing the gaps in rate disparity when they occur.

Lastly, we actually have good relationships with our competitors - if they overbook (surprising how bigger establishments overlap guests and need to accommodate them for a day) we are always on hand to use our 'gaps' to take the one day stayers despite our three day minimum policy. There should be no empty beds1

9 months ago
3
Corinne Orde

If you have a three-day minimum policy, yet are prepared to take your competitors' overflow guests to fill gaps, isn't that rather unfair on potential bookers who would have loved to stay for two days at your place but were forced to look elsewhere because they couldn't afford a third night? They may be very disappointed indeed to miss the chance of staying with you and enjoying your sea view, whereas others do get that privilege who weren't even wanting to stay with you in the first place! This isn't necessarily a criticism, it's just that I'm curious how this policy works in practice.

I recently implemented a two-day minimum at weekends for my B&B because I couldn't cope with the laundry and fast turnaround, but I felt really guilty doing that. A lot of people need somewhere to stay for just one night, and I wonder how they manage. However, this is really a discussion for a different thread.

9 months ago
2
Shirtsandsigns

@Corinne Orde our b&b with just 3 suites and staffed only by the owners sounds as if it may be like yours. We too work our butts off at busy times with heavy turn around.

I understand the guilt you feel but you must do what is best for yourself. If you overwork for too long you will burn out and all future guests will miss out. If you should aspire to growing to become a larger hotel with staff to handle increased turnaround then you must make more money to cover those improvements and wages. Thus one night stays or 3 night minimum, the best is whatever gives the most profitable outcome. If you have a one night is ok policy and yet you only book a room for one night on a weekend (and it is empty the other night) then you make less than if you had a two night policy, even with a discount to effect more two night bookings.

Regarding 3 night policy and overflow from competitors, it is an individual situation that we each need to consider and perhaps test. Whatever fills the most rooms in the most profitable manner will give you the best freedom to offer the most people a pleasant holiday. We always keep one of our suites open for one night stays, while others are minimum two nights in busy times. Weekdays are often times with empty rooms and we will take anyone! I sometimes try to move guests to an alternate suite to align empty nights (Thus allowing an extra two night stay, even if change over becomes more hectic) this process, even if it involves a free upgrade can make more money if it frees up a suit for an extended stay.

9 months ago
3
Akwador

Hi Corinne,

I see your point, however why should we pepper our accommodation with multiple single days that then prevent other guests from booking 3 days to two weeks because we have a multitude of single days slap bang in the middle of when they wish to stay with us?

The majority of our guests are trying to come here for a full holiday (sometimes a full 14 days) whereas the majority of single day guests are simply using us as a stopping point because we are near the airport and the rest of their holiday was booked elsewhere.

We are therefore a little mercenary (for good reason) in our policy and it works well. If we have single and two day 'gaps' - we THEN open those rooms to people who are seeking them - but not before we have given our long stay guests the opportunity to book.

At the end of the day, as much as we are in the business of making the most for our guests, your emotions should not interfere with good business sense.

9 months ago
7
Katerinka12

"we are the only accommodation that gives each guest a welcome tour of their room"

How do you advertise it? Or that's for your loyal (returning) clients?

I am surprised, that you are only the one with best view and yet other properties are overbooked and you are not

9 months ago
3
Akwador

Reply to Katerinka12

"we are the only accommodation that gives each guest a welcome tour of their room"

How do you advertise it? Or that's for your loyal (returning) clients?

Reply: We don't actually advertise it - however it is mentioned consistently in our reviews as a positive. We treat ALL guests the same, whether 2 weeks or 1 day, they get the tour. An acute observation of body language tells me to either to make it snappy or indulge the guest with a half hour long discussion. :-)

I am surprised, that you are only the one with best view and yet other properties are overbooked and you are not full.

Reply: We are full. But it is almost impossible to avoid 1 or 2 day gaps between some bookings which we then open up to short term bookers. Our main competitor has a 60 room hotel and various reception staff - they quite often get overbooking (a bad thing!) and phone us for help in accommodating them. We are much smaller and have a channel manager plus monitor each arrival by placing them into a spreadsheet. We therefore spot over bookings almost immediately (only 4 in total in 5 years) - all mistakes were usually caused by not reopening a cancellation correctly or a channel manager connection problem at time of booking.

9 months ago
8
Leandri Klopper

Hey Katerinka12 ,

Late reply sorry. You asked regarding closing the rooms to gain Performance.

I'm currently playing with it to see if it makes a difference and I think it Might actually be working. Remember your performance as a property has to do with How many units were left standing open on Booking.com versus how many of them sold. But if you remove the units/close the units then logic dictates that Booking.com does not count this as poor performance.

I'll keep you all updated on whether or not it makes such a massive impact, but so far it really looks like it.

Hope this helps?

9 months ago
3
Corinne Orde

@Shirtsandsigns Having different minimum stays in different rooms is an excellent idea. Thank you very much for the suggestion. I don't know why this didn't occur to me. I will try a two-night minimum at all times in my most expensive suite, the family room, which has an additional bed, suitable for a child, and which has the most work to do at changeover. Sometimes three adults turn up (having booked as two adults) because they've seen the extra bed in the photo. Mostly this type of guests are one-nighters going to a wedding. Or two adults who are friends use it as a twin room and use both beds. A two-night minimum will act as a deterrent to this type of guest, or at least force them to stay an extra night.

9 months ago
1
Info Ticoticocr

We are an aparthotel with flexible stays. We are in a resort town and offer a unique option of flexible stays and kitchens in our units. We based prices on our position of quality and offerings compared to the rest of the market. We set a calendar for the year, with daily, weekly, monthly and national rates. Then we adjust them based on demand, exchange rates of the local market.

We are going into our second year and have a lot to learn in this market. It is helpful to read about others strategies and systems.

8 months ago
1
Reservations

Hi everyone,

It is great to read all your reviews here. I believe I can collect a lot of information and experience from your word. I have concerned that which pricing strategy I could apply to attract guest in a last short period. In fact, I would like to attract more bookings for the end of January. We are a resort in Nha Trang city, Vietnam. And at the end of January, it is not the peak season as the local and nearby countries travelers tend to stay at home and prepare for the Lunar New Year which is the most important Holliday. But perhaps we could do somehow to have more guests from Europe or USA. I know it is more like of last minute. I would like to hear actual experience from all of you.

Thank you very much.

6 months ago
2
Sharonhaseley

I did a lot of research into what my competitors charge and what they offer, I then priced as to what I felt fair even though we are priced in the higher bracket, for the first year at least we have one price throughout the season and no minimum nights stay, however this may change next season.

6 months ago