Five ways to find the right pricing strategy for your hotel

Revenue managers dedicate a big part of their day to managing hotel rates and driving profits. They are constantly analyzing data and various influencing factors to find that coveted sweet spot – and a revenue manager’s greatest reward is finding the ideal public pricing that attracts guests and boosts their organization’s bottom line.

NB This is a viewpoint by David Wilker, senior manager of product management, IDeaS Revenue Solutions.

However, what makes accomplishing this task so complex is that each hotel property is unique and therefore its revenue strategy must be too. After all, the size of a hotel’s profit margin depends largely on revenue from a great pricing strategy. It’s essential that hoteliers thoroughly evaluate options to determine what’s best for their business and customers.

To get started, hotels should ask themselves these five questions to determine their optimal pricing approach:

1) What do my guests want?

Since guests are often the ones paying the bills, it’s important to consider what type of rates they prefer. Beyond preference, some regions or audiences may be accustomed to a certain process and changing it may result in dissatisfaction or lost clientele.

For example, some guests prefer to know how their cost of stay breaks down by day. In this case, daily pricing or daily continuous pricing strategies would be ideal.

Other guests, however, may prefer the simplicity provided by one rate lasting for their entire stay. In these cases, consider length of stay (LOS) pricing strategies.

2) What strategy best complements my business mix?

To properly optimize revenue, it’s important to select a strategy that fits the hotel’s portfolio of business. The two biggest considerations are the hotel’s business model and the guests’ average length of stay.

For example, a hotel focused on airport transient guests with an average one-night stay will be a better fit for daily pricing strategies.

Alternatively, luxury destination hotels that cater to high-end vacation audiences will have longer lengths of stay. As a result, a flexible or LOS strategy would be a better fit.

3) How does this affect my connected channels and distribution systems?

Hoteliers should evaluate any potential impacts on the following when considering various approaches:

  • property management systems
  • central reservations systems
  • selling systems
  • distribution systems
  • channel management systems
  • web booking engines

Which pricing strategies are best supported? What would be required to integrate a new strategy? What’s the cost and potential ROI? It’s important that hotels ask probing questions to get the answers they need.

4) Which pricing approaches are accepted by my integrated channels?

Consider the top channels by production volume and start to research which approaches are broadly accepted.

For example, what does the hotel’s online travel agent (OTA) channels accept? Will they accept minor deviations? If there are OTA channels that can’t accept a particular pricing approach, how will anticipated revenue be impacted?

5) Which experts can help you determine the right pricing strategy?

Ideal Pricing from IDeaS Revenue Solutions offers myriad flexible pricing approaches and features for public, group and events businesses. Experts are available to counsel hoteliers and provide invaluable insight into the best strategies based on every hotel’s unique needs.


SC MARCH16 NEW IdeaS 400w


NB1 This is a viewpoint by David Wilker, senior manager of product management, IDeaS Revenue Solutions.

NB2 Image by Tsung-Lin Wu/Bigstock

Share on FacebookTweet about this on TwitterShare on LinkedInEmail to someone

About the Writer :: Sponsored Content

This is the byline under which we publish articles that are part of our sponsored content initiative. Our sponsored content is produced in collaboration with industry partners. The views expressed do not necessarily reflect or represent the views of tnooz, its writers, or partners.



Your email address will not be published. Required fields are marked *

  1. Errol

    Which channel managers can you safely say works with the ‘BAR by length of stay’ model since most channel managers can only facilitate a ‘BAR by day’ strategy?

    • Kathryn @ IDeaS

      Hello Errol, thanks for the comment. We partner with several distribution system providers that support the delivery of more advanced pricing decisions mentioned in this article. IDeaS would be happy to discuss available options with you in more detail, please feel free to contact us through or email

      • Errol

        Dear Kathryn,

        Thank you for the reply. I am currently working with IdeaS G2 and waiting to go live with G3, however we are unable to find a channel manager which can handle BAR by length of stay. If you can provide the names of one of these several distribution systems we would greatly appreciate it.

        • Kathryn @ IDeaS

          Hello Errol, we have passed your question over to your dedicated Client Relationship Manager. They will be reaching out to your Revenue Manager to discuss available options for your property and its systems.



Newsletter Subscription

Please subscribe now to Tnooz’s FREE daily newsletter.

This lively package of news and information from Tnooz’s web site provides a convenient digest of what’s happening in technology that drives the global travel, tourism and hospitality market.

  • Cancel