How the Internet Impacts your Hotel Pricing Strategies?

As a hotelier, you must be experiencing important pressure when deciding for your room’s pricing. Indeed, today’s digital era has made it very challenging when it comes to setting up prices with the wide access of information in the internet. As a hotel marketer, it is crucial to put a strong focus on this marketing mix variable to maximize your property’s occupancy. Your pricing strategies are essential parts of your hotel revenue management. The way hotels develop their pricing strategies has been highly influenced by the internet. Selecting the right room rate will allow you to sell most of your rooms, obtain maximum revenue and differentiate from your competitive set.

Implications of the Internet on your Hotel Room’s Pricing

Nowadays, hotel brands have developed multichannel marketing strategies which makes it easy for potential guests to compare prices. As a hotel marketer, you need to carefully analyze the market before selecting an appealing room rate for your property. Indeed, internet can allow you to be exposed to customer’s response in terms of pricing and evaluate the demand accordingly.

Here are two effects of the internet on your hotel’s pricing strategies:

Increased Price Elasticity

Pricing information are widely available on the Internet which stimulate people to browse online. Indeed, people have the ability to explore the different pricing offered by the properties of their interests for a hotel stay in a few clicks. Internet has increased price transparency among your potential hotel guests. In other words, people are more and more knowledgeable about price offering in the hotel market. The more guests are aware of your competitor’s prices, the more the demand for your hotel room’s is elastic. It means that people are more sensitive to your pricing strategies. As a hotel revenue manager, it makes it more difficult for you to raise your room’s price in a market where there is a vast demand. It is crucial for you to carefully study your competitive set pricing so you can determine the most suitable room rate to attract your target audience.

Increased Price Innovation

Internet has allowed significant innovation in terms of pricing strategies. First, internet has allowed dynamic pricing which allows hotels to update pricing in real-time according to the market conditions and guest’s reactions. Besides, hotel marketers have offered incentives to people who proceed with direct booking in their property’s websites. Indeed, internet has encouraged hotels to promote offers and upgrades on their sites so people are motivated to book a stay. Internet has inspired hoteliers to use their creativity and develop hotel packages to appeal their target audience and distinguish from their competitors. People are constantly exposed to outrageous hotel discounts and loyalty programs which drives innovation in terms of pricing strategies to attract potential guests.

In sum, internet has offered more convenience when it comes to booking a hotel stay. However, it requires much more efforts to hotel marketers to implement effective room pricing strategies to gain more in your property’s occupancy. The rules for setting up prices have inevitably changed in this digital world in which people can simply access to a wide quantity of data online. In order for your hotel to stay competitive in this intense industry, you must study the trends on the internet and strategically decide on your pricing strategies. It is time for you to spend more time investigating online so you can apply attractive room rates that will drive your booking conversions and maximize your revenues!