Usually, it makes sense to sell your rooms for the highest price possible without oversacrificing occupancy. Though hospitality at its core is about people, making money is essential to keeping your doors open and providing memorable guest experiences.
NB: This is an article from WebRezPro
Subscribe to our weekly newsletter and stay up to date
However, there are exceptions to this general rule – times when lowering your prices can serve your overall financial and guest retention strategy. When done purposefully, discounting can support your property’s long-term goals and yield strong returns. Scattershot markdowns, on the other hand, do not. Gut-driven discounting can reduce revenue without meaningful corresponding gains in occupancy, brand awareness, or guest relationships.
Here’s how to plan and time discounts that benefit your property’s future.
Targeted Discounts
Set goals for your property and understand how discounts for specific guest segments further those goals by incentivizing bookings. Keep in mind that not all discounts are effective for all guest types, so delve into your data beforehand and tailor discounts to the right audience.
Shoulder Season Discounts
Shoulder season is the period when travel slows, usually during spring and fall. Over a quarter of US adults made plans to travel in July, while only five percent made plans for September. When demand drops this steeply, competition intensifies, and discounts are commonplace.
This is also a great time for giveaways that increase brand awareness without sacrificing rooms that would otherwise be occupied.
However, the ethos surrounding shoulder season is shifting with the rise of workcations and travelers looking to escape heat and crowds. As the planet warms, people proactively seek lower temperatures on getaways known as “coolcations.” In 2024, 82 percent of Virtuoso luxury travelers expressed interest in this kind of trip.
Travel patterns are evolving, so analyze your booking data to confirm your shoulder season dates before lowering prices.
Loyalty Programs
Offering discounts to loyalty members and repeat guests doesn’t devalue your property; it values their continued business and the steady revenue stream it creates. In fact, a five percent rise in customer loyalty causes a corresponding profit increase of over 25 percent.
Competition for these profitable guests is fierce, with dominant industry players collectively adding over 500 million new members to their loyalty programs since 2018. To stand out, offer flexible rewards, experiential benefits, and personalized incentives based on comprehensive guest data. The more tailored the offer, the more likely it will be accepted.
