Do your hotel’s least expensive rooms often fill quickly, while premium rooms and suites sit empty or are given away as free upgrades?
NB: This is an article from RoomPriceGenie, one of our Expert Partners
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Do guests and staff often get confused about the differences among room types?
Managing room categories is one of the most challenging aspects of hotel revenue management. It’s especially important for small, independent properties because every booking counts. If you’re not optimizing inventory, you’re missing out on revenue opportunities.
To help, here is an introductory guide to managing room descriptions, photos, and pricing to maximize returns on your room inventory.
Assigning Hotel Room Types
One of the first tasks for a new hotel is to assign room categories. This presents a dilemma: How many room types should you have in your inventory? We find that most hotels fall into three main categories.
- Too few room types. Research shows that consumers like to have several pricing tiers to choose from when shopping for a product or service. Today, consumers can select from basic, premium, and deluxe options when purchasing a flight, filling their gas tank, choosing a car wash, or buying concert tickets. The “good-better-best” approach to pricing can also be applied to hotel rooms to boost sales.
- Too many room types. However, if consumers have too many options, they may become confused or paralyzed with indecision and end up dissatisfied with their choice. This is called the Paradox of Choice. From an operational perspective, hotels need the flexibility to juggle room assignments when it’s busy, and that’s more challenging with fewer room types. While guests love upgrades, a downgrade is a fast-track to a bad review.
- Just enough room types. So, what’s the sweet spot? While each hotel may be different, smaller properties will ideally have at least three room types and larger hotels may have as many as ten or more. This allows the hotel to offer an attractive low price for entry-level rooms and higher prices for premium rooms. Of course, there are exceptions. For an historical inn or serviced apartments, every room might be different, and that can be a big selling point.
How to Categorize Room Types?
Room types are usually grouped together based on shared characteristics, such as:
- Size or quality of the room (standard, deluxe, suite, etc.)
- Maximum occupancy or bed configuration (single, king, queen, double, twin, dorm, etc.)
- View (ocean, city, mountain, pool, garden, etc.)
Naming Hotel Room Types
Now, what will you call your room types? This is an important task because names are a form of advertising. They help inform travelers’ decisions and set their expectations.
While it can be fun to come up with creative names, think about your prospective guests. Will it confuse them? How will the names translate into other languages?
Simple and practical is better. Think of each name as a news headline. What will compel the traveler to click to learn more?
Highlight the top criteria travelers use to select rooms, including:
