During periods of increased demand, it’s possible to elevate your room prices to make the most of the average daily rate (ADR). There are limits – don’t forget you have a brand and reputation to maintain, and your competitors can undercut you – but guests will expect to pay more at these times as long as it’s a fair price.
NB: This is an article from Lighthouse
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Occupancy is rarely a problem in the high season, so seasonal rates being raised allows hoteliers to maximize profits by capitalizing on this heightened demand.
This isn’t profiteering; it’s a reflection of how keen travelers are to find accommodation and enjoy a positive guest experience, and these increased rates will help to offset the lower rates you charge in the off-season, the subject of the next section.
Maintain high occupancy rates during the off-season, a.k.a. low season
In times of reduced demand, strategically decreasing your rates – while keeping an eye on your compset to ensure that you don’t sell yourself too short – will enhance room occupancy, the key metric during these periods.
Get it right and you’ll keep your hotel full all year-round by setting competitive seasonal rates to beat the competition – but not by too much – or offering discounts to encourage bookings.
It’s all about familiarity with occupancy and its relationship with revenue. If you find that sweet spot, you can maximize revenue and stay profitable even though you’re charging less per room; just bear in mind your fixed costs.
If you can accurately monitor demand, you might not be able to guarantee full occupancy when pick-up is low but you can “stay the course and achieve a solid ADR” like Lisbon’s Inspira Liberdade Boutique Hotel, which saw this “KPI grow by roughly 10-15%” when using the right tools.
Remain competitive during the shoulder season
Of course, time of year is complex and seasons aren’t really binary; they have blurred edges. Which brings us to your shoulder seasons. Put simply, these are the periods between your peak and off-seasons (or low season).
Recognising that various months in your calendar can’t be neatly packaged into one box or the other, with off-the-shelf seasonal rates and promotions to match, might not be a convenient message, but it is an important truth, illustrating the need to keep a close eye on competitor rates and market demand, and act accordingly with your prices, offers and other activities.
