Organized Chaos: How to set your hotel's room rates?

This month we're focusing on one of hoteliers' main concerns: it's hard, time consuming and complex to sell rooms online. We've already covered the obstacles you may face, as well as some tips to improve your hotel's website. Today we're going to focus on your rates. No one's going to book with you directly if they can get a better deal on or Expedia.For hotel guests, it can be tough to understand how the cost of the same room, at the same property, can vary dramatically from one day to the next. and it's often just as frustrating for hotels: room rates can be quite a duanting topic. Especially for independent properties who are not able to invest in revenue management experts and are bombarded with varying opinions from numerous sources. Yet, like everything in life, room rates can be made to look more difficult than they need to be. This is where we come in.

There's an abundance of information available to those setting room rates – yet limited guidance for one of the most important business decision facing them. How a hotel prices it's rooms is based on a multitude of factors including the season, what their competitors are doing, views etc. Prices for rooms may change over time as any of these factors vary. Providng value and a great customer experience is key for any hotel and fair pricing usually comes top of that list.

Show how unique your property is
Most of the time when I'm searching for hotels, they all look kind of the same. In that case, I'll just try to find the best deal between the price I'm willing to pay and the quality I want to get. But sometimes while looking up, I'll find a hidden gem: hotels and boutiques with character, which make me feel I'll have a unique experience there. The amenities and the interior play a huge part in whether I book somewhere if I'm looking for a restful break, if it's a work trip location is more important. Another part is more intangible, and ties back to the hotel's atmosphere. Looking at their instagram pictures or real pictures on TripAdvisor helps me make my final decison.

I should be able to read and see the difference, character, personality - or whatever we want to call it - in the hotel pictures, in the room descriptions, on the website, and even in the reviews. Many hotels will have standard pictures, room type and amenity descriptions. You can keep ahead of the posse by describing your room types to prospective guests in greater detail and highlight what makes your property unique, which in turn allows you to charge premium price. You can make sure your pictures work for you. I'd recommend you read this article about selecting the RIGHT image for your hotel. In short, use everything you have at your disposal to market your hotel.


Vary the pricing
Airlines have always charged different prices for hotel rooms as fares are determined by market supply and demand and hotels are no different. You want to change your rates according to a few elements:

  • Rooms traditionally occupied by leasure guests should probably be priced higher on weekends and holiday times. While rooms prefered by business travelers should be the opposite. 
  • Some weekends, due to local events or national holidays, are busier. This weekend (2/13/16 > 2/15/16) for instance combined Valentine's day, President's day and gorgeous weather. As demand surges, guests are ready to pay more to get what they want. Make sure you don't get full too soon, which would mean you've been pricing your rooms too low. If you don't use a revenue management solution, analyze your occupancy and ADR for previous years, monitor the event calendar and price your rooms accordingly. 
  • When your hotel is getting full ahead of time, you want to make sure you raise your prices. And vice versa. 

A good hotel management system should help you build a flexible and dynamic rate strategy to handle all those situations - and more - so you sell more rooms at a better price. At least ours do, check it out:

Take a tour


Match or offer better deals than OTAs
For hotels, it's not just a matter of setting the right price for a room, but convincing guests to book direct, rather than through a third-party site, like or Expedia, which have better online visibility and get an important commission on your bookings.   

Over the last five years the commissions paid to those third-party intermediaries have been growing at roughly twice the rate of hotel revenues. Making guests want to book directly with the hotel hinges on various factors, including improving the hotel site's experience and "getting the pricing right.''

There are many independent hotel websites that actually turn direct website bookings away because the price they advertise on their own website is more expensive than advertised elsewhere, or simply not even displayed. And making a reservation on those sites can be a challenge. Make sure:

  • You display up-to-date rates and inventory on your website.
  • These rates match or are better than what visitors can find on OTAs. Don't hesitate to offer a little extra, such as a free cocktail on arrival.
  • Visitors can make a booking easily, and feel safe about leaving sensitive payment information.

This will often require a property management system that integrates with booking channels and offer a sleek booking engine. 

Share special rates for special customers
Group or promotion codes are a great way to publish secret rates to your website booking engine that only specific groups of people can see. The group can either be an organized set of people traveling together such as a business team, wedding or church group. Or, the group could be people in an advertising campaign such as in a magazine or email list. The ability to offer a special and unique rate via your website booking engine to a specific group gives you the ability to allow online, instant bookings while hiding those prices from the general public.

Load your rates in advance
Do you want to increase your exposure to as many potential guests as possible and guarantee that your property is always visible on booking sites? All you have to do is load your rates and availability for at least 12 months in advance, and make sure they're dynamically updated when you change your rate strategy. With limited resources and only a select number of hours in a day it is near impossible to manually keep all of your rates and availability updated if you are advertising across multiple booking channels. This is where smart hoteliers will integrate their website to an all-in-one system that will manage their channels. A channel manager is part of a system which allows you to centralize and automatize the management of your different online distribution or booking channels (Expedia,, LateRooms, etc).

Work out what’s right for you
Each property is different, so measuring your success and tweaking your pricing to suit is instrumental to your success. How else will you know whether it has increased your occupancy rate and your revenue? As a hotel owner, you will have to make the final call on what you want to achieve most with your pricing and then put your chosen strategy in place. Use your reservation and accommodation management system to draw up essential hotel reports for specific periods of time to know if you have the correct pricing strategy in place. 

If you feel your hotel PMS is not keeping up expectations, we'd love to walk you through Frontdesk Anywhere with a free, no-commitment demo today: 



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