As we settle into 2025, independent hotels and small hotel groups face a rapidly evolving pricing landscape.
NB: This is an article from RoomPriceGenie, one of our Expert Partners
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Understanding key trends and adjusting your approach can make a big difference in maximizing revenue while keeping your guests happy.
Here are five pricing trends to watch – along with strategies to help you stay on top of the opportunities and ahead of your competitors.
TREND #1
Sticker Shock: Get Ready for Price-Sensitive Travelers
Inflation-weary travelers are watching their budgets more closely and demanding better value, especially those staying at economy and midscale properties.
But inflation hasn’t just impacted travelers – it’s hit hotels too. In 2025, further rate increases may be necessary to cover rising operating costs.
What to do:
- Monitor your room pickup closely to ensure your prices aren’t too high (which could deter bookings) or too low (leaving money on the table).
- Keep an eye on competitor rates, but avoid engaging in pricing wars that erode profit margins and harm long-term pricing positioning.
- Remember that raising rates is often more profitable than increasing occupancy, as a larger percentage of revenue from rate growth flows to the bottom line.
TREND #2
Softer Demand: Boost Occupancy With Longer Stays
After years of strong room demand, growth is expected to soften in some regions this year. One way to offset this is to increase the average length of stay. Longer stays not only bring in more revenue but also reduce acquisition costs and room turnover.
Many hotels accept the first bookings that come along, even for just one night. On busy dates, this can prevent you from accommodating guests looking for multi-night stays.
What to do:
- Offer discounts on longer stays, such as a minimum of three nights, with deeper discounts for seven nights or more.
- Implement minimum length-of-stay (LOS) restrictions on high-demand dates to prioritize longer bookings and prop up occupancy on shoulder nights.
- Use RoomPriceGenie’s new Minimum Stay Restrictions feature to optimize room inventory and boost revenue while reducing operating costs.
TREND #3
Crackdown on OTAs: Reclaim Your Pricing Freedom
For years, OTAs like Booking.com and Expedia have enforced rate parity agreements, preventing hotels from offering lower prices on their websites – the most effective way to attract direct bookings. But this is starting to change.
