We have discussed they key elements of Pricing and Positioning in the earlier parts of our 4-part blog series on the 4 Ps of Revenue Management. Strategic positioning provides an accurate description of your target market segment and paints a concise picture of how you want your hotel brand to be perceived as well as the value it offers. Hotels devise a pricing strategy based on how they have positioned themselves. The positioning and pricing strategies will have an impact on the performance and profitability of the hotel. In the third part of the series, we will be discussing the element of Booking Pace.
Pace refers to the rate at which reservations are made for a particular date for a hotel. It offers a glimpse into the future occupancy patterns of the hotel. Booking Pace monitoring is one of the most critical factors to decide on day to day Hotel pricing; yet this crucial aspect is commonly ignored by most hotels. The information, relating to the way bookings are materializing on each future day, is necessary to counter competition and ultimately control hotel occupancy for each future day. Another key reason for monitoring booking pace is that it helps identify patterns over a selected period of time, which, in turn, helps with demand forecasting.
Majority of hotels end up filling rooms early on high demand dates and probably at lower rates. It becomes important to have incisive understanding about Hotel demand pace, not only by segments, but also by each day of week. Right pace monitoring can easily create an additional Revenue of upto 10% in the existing demand.
Key factors to consider:-
In the final installment of our blog series, we will focus on the key element of Performance and the impact it has on the overall growth and profitability of a hotel.