🏨 Understanding Hotel Room Pricing
📈 Hotel room prices are influenced by demand and supply. Demand varies by day of the week and season, with Tuesday and Wednesday being peak for corporate travel, while Friday and Saturday are peak for leisure destinations.
🌍 Seasonality affects hotel performance, with ski resorts seeing high demand in winter and beach resorts in summer. For example, in Dallas, peak travel months are spring, summer, and October.
🏢 Supply refers to the number of hotels and rooms in a market. As demand increases, new hotels are built, which can dilute occupancy and lower rates. Hotels conduct a SWOT analysis to assess their competitive position.
💰 When booking, the Best Available Rate (BAR) is typically the highest rate offered. Other rates, like Advance Purchase and Senior Discounts, derive from this rate.
🎉 For example, during peak ski season around New Year's Eve, prices can range from $131 to over $4,000 depending on location and amenities.
📊 Key factors in pricing include historical data, pace (current bookings vs. last year), and pickup (room nights gained or lost). A good revenue manager monitors competitor rates closely.
🔍 Demand forecasts are crucial for pricing decisions. If demand exceeds supply, hotels can increase rates. Advanced systems like AI and machine learning are used for accurate forecasting.
📊 Market segmentation helps hotels categorize guests and adjust pricing strategies based on different demand types.
🔑 In summary, hotel pricing is a complex equation involving competition, demand and supply dynamics, historical trends, and market segmentation.