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Recently I came across this video, regarding the discounting price strategy of hotels. As I have posted before, discounting is a negative pricing strategy, which could cause more damage than good on the long term. As it is easy to drop the rates, but harder to increase the rates.

An alternative strategy would be to add value components to your room rate, or add items for which you would normally charge. (Wifi, newspaper, gym, etc). Understand your guest, their needs and their wants.Understand your surrounding environment, what is going on, what is the trend, who is moving for what.

Take you time to look at the video below.

If you have problems, please click the following link: Video

Recently the discussion started that Hotels in Phuket Thailand would feel that due to competition, the rates were under pressure. It’s true that the market is controlled by supply and demand, and over supply will have its fierce effect on the average rate. Proper rate management would be the tool to help you as a revenue manager or Hotel manager, to benefit from this effect. The first step of Revenue Management is to start preparing your price strategy. It is not only about what your competition is doing, you better of doing it different and sooner. By creating your own plan, based from your budget, you can control what would be acceptable selling your rooms at a certain level, rather then that the pressure of your competition will force you to make decisions which will negatively influence the financial performance of your hotel.

Learn more about this and other useful tricks on hmsthailand.com