Kacey Bradley | September 06, 2019
By Kacey Bradley
Your pricing strategy should be variable, something that can change and evolve over time. You cannot anticipate the market and the consumers in it with a rigid structure. To approach the value of a hotel room, you need to consider a variety of factors, not just one. While some components are under your control, others are not.
Check out eight things that affect the value of hotel rooms below.
1. The economy
It might sound like common sense, but the economy has a significant effect on hotel room prices. Over the past 20 years, the industry has experienced two significant declines – one in 2001, after September 11 and a second in 2008 after the global economic crisis. Today the market has partially recovered and unemployment has declined. Hoteliers can upgrade rooms at higher rates when the economy is healthy and consumers have extra spending money. It is essential to always remain aware of the global market.
2. The location
The physical location of a hotel has a significant impact on the going rate. The value of your room will increase if the main attractions – such as a metropolitan area, amusement park, museum, natural wonder, etc. – are nearby. If you are away from anything of interest, you may have to compromise on the value of the room to attract guests. If there’s nothing nearby, think about how to make your hotel a desirable destination on its own.
3. The competition
Nearby competitors may benefit your hotel. Their presence will increase the demand and market size for all hotels in the region in general. Healthy competition encourages brands to re-evaluate the customer experience and improve offerings. However, he can also create a double-edged sword. If a 400-room hotel underestimates rooms to drive bookings, it may exclude a 100-room hotel that is unable to cut costs to that extent.
4. The type of room
What do your rooms have to offer? What sets you apart from the competition? A standard experience – a bed, TV, mini-fridge, etc. – will get the standard value. Increase the value with in-room amenities like free WiFi, a luxury mattress, and a coffee / tea bar. Give guests what they need to enjoy their experience in the privacy of their own room. An improved customer experience equals a higher room value.
Cleanliness is crucial in the hospitality industry. First impressions are made as soon as a guest walks through the door. Guests will be on the lookout for common hotel pests, such as bed bugs, cockroaches, and mice. Avoid a catastrophe that can inflate the value of the coin teaching your staff about pest prevention standards. Look for extermination professionals and keep a speed dial expert in case something goes wrong.
6. Room service
Some customers, after checking in, do not want to leave their room, even to eat. Hotels that offer room service may rate their rooms at a higher rate. Today’s hotels are making room service an innovative experience, offering authentic cuisine made with fresh, local ingredients. Others cater to busy travelers with healthy and nutritious take-out options. Many use technologies such as smartphone apps to simplify the ordering process.
Technology is advancing rapidly. The hospitality industry is learning to use new resources to improve the guest experience and increase the value of rooms. Smart technologies, such as remote check-in and mobile room keys, meet customer wants and expectations. Many guests prefer eliminate the reception process absolutely. For hotels, this can significantly reduce personnel and labor costs. Occupancy sensors can also serve food menus to customers’ smartphones at optimal times.
8. Online presence
Today’s tech-savvy travelers trust reviews to find out more about a place before they go. According to a study, 95% of travelers read the reviews before booking. If you don’t have an online presence – or worse, a negative one – you’ll lose a lot of the market. Make sure your hotel information is online and easy to find. Encourage customers to leave positive feedback. Online reviews that recommend your hotel can dramatically affect room demand and value.
You can embellish a room as much as you want, but it won’t necessarily improve the value. Several factors determine the ideal room rate, including location, competition, technology, and online presence. Consider the big picture before deciding on the value of the customer experience.