Pricing is the process of setting rates to get the optimal revenue. It can be dynamic and will be demand and season driven. There should be a strategy on how much a price set at the beginning of the year as a standard rate can move up or down throughout the year depending on demand. So for example it would be recommended that as a base rate of 100, the highest rate should be 110 and the lowest 90, a 10% fluctuation from the base rate depending on demand levels.
Typically inventory can be classified as:
- A hotel
- A long stay apartment
- A hostel
- Food & Beverage restaurant facility
- Meeting rooms
- Attraction or activity
Developing the RM rate strategy should be based on typical customers needs that could be defined as follows for example:
- Mid to low price level and desire to seek value for money
- A location near to things to do and see
- Convenient location for business travellers to visit local companies/offices
- A safe and secure environment to stay in
- Clean and tidy room and public areas
- Near to transportation hub
- Easy and hassle free bookings
- Access to a fast and reliable WIFI network
Revenue management
Goal and mission
Market segmentation
Pricing and rates
- Rate parity
- Price strategy
- Price segmentation
- Pricing grid
Budgets, forecasting and a demand calendar
Capacity allocation
Performance
IT / Analysis support tools
