How to choose the right pricing strategy for your hotel

The Ultimate Pricing Strategy For our Hotel Business

The rooms of your hotel are one of the most powerful tools for increasing the revenue of your hotel. It allows you to segment and position your hotel and differentiate yourself from the competition. If segmented correctly it also allows you to build a revenue management strategy based on a comprehensive demand based yield or rate grid.

Setting the right price for the hotel rooms can be a complicated and even disastrous process, if not done right. So it is important to make a detailed study of the different strategies before choosing the right method for you.

In this article, we’ll look at some of the most common approaches to pricing, and evaluate their pros and cons.

1. Single rate

This is the simplest method to set a single price for the whole year. It’s easy to implement, but you may miss out on a huge amount of profit every month if you use a single rate for a whole year. You can opt for another strategy to applied the same rate whether one person or two people stay in the room.

2. Seasonal pricing

In seasonal pricing, you adjust your rates according to the demand at different periods of the year. If you’re in a summer-holiday destination, it is profitable to raise your prices for that period to attract the customers. Conversely, to attract clients during low season, you’ll usually need to offer lower prices.

3. Weekend/weekday pricing

This approach is the starting point for many properties’ pricing strategies.This involves a basic split of prices between weekday and weekend. Generally, weekend prices would be higher – but if a property caters to business travelers, they may set higher prices during the week.

4. Price Per Segment

One of the most commonly used pricing strategies for those in the hotel industry is price per segment. In this strategy you can offer the same hotel room at different prices to different customers according to the situation.

Open market prices should be subject to a rate parity strategy, prices for corporate segments could be lower, especially if they commit to a certain number of rooms, or a certain number of meals. Another option would be to sell multiple rooms to travel agents for a lower rate, so the travel agent can include the rooms in packages.

5. Length-of-stay pricing

These are deals for guests looking to stay for a specific length of time. For example, you could offer a cheaper price for three-night stays as a way of attracting clients who tend to travel for long weekends. You could also set up three-night prices for special events like New Year’s Eve. While this can be a good way of securing extra bookings, it can also be restrictive because you may not be catering to the most dominant target audience in your area.


If you want your business to be successful, you’ll need to choose the right price strategy for your hotel rooms. After all, setting the right prices will help you secure more bookings and make more profit.


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