As hotel demand in some ways returns to pre-pandemic patterns and guest behaviors evolve, hoteliers are working out how to best price different room types. Different booking patterns, changing guest preferences and new technology all come together as hotel revenue managers figure out rates for rooms as well as room upgrades.
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Pricing Rooms
In the robust hotel market prior to the pandemic, hotels were pushing premium pricing on just about everything, said Wendy Stevens, chief operating officer at Maverick Hotels & Restaurants. During the pandemic, her company’s hotels were pricing upgrades and room types lower to entice guests to book and to generate incremental revenue.
“Thank goodness we have rebounded and we’re not using those practices as much,” she said. “It feels good that we’re able to charge the premiums for the better rooms or be able to upgrade the best guests.”
Similar to before the pandemic, guests during the week typically don’t want rooms with queen beds unless they’re at a lower price, said Nancy Obstler, vice president of sales, marketing and revenue management at Raines. Sometimes corporate travelers want the double queens so they can sleep on one bed and keep their belongings on the other bed.
The queen rooms are more popular on the weekends, and the hotels will push the rates on those as demand increases, she said.
As more corporate travel returns, some hotels will require minimum stays of three nights to reduce the burden of turning around rooms amid shortages in housekeeping staff, Obstler said. It’s a challenge if corporate travelers are staying for one night, requiring daily cleaning for the next guest who will stay only one night.
These hotels will sell out on Tuesdays and Wednesdays now, but this strategy helps with the Mondays and Thursdays as well, she said.
“We’re tending to want that longer length of stay to be able to get a better [revenue per available room] and help the operations of the hotel,” she said.
Demand for upgraded room types has always been strong at Marcus Hotels & Resorts’ leisure-driven hotels, said Linda Gulrajani, vice president of revenue strategy and distribution. That was more pronounced during the pandemic when almost every traveler was a leisure traveler. Guests then weren’t particularly price-sensitive, so they were willing to pay for upgraded room types, even at the traditional urban hotels.
