How should you be setting room rates for your hotel?

Although we have a way to go, it feels good having words like ‘recovery’ back in our vocabulary. Last week, we held a webinar and wrote a blog about the importance of focusing on the domestic market as you establish your recovery plan.
Continuing in a similar vein, earlier this week two of our Senior Ecommerce Managers, Maeve Walls and Peter Cooke, held a webinar focused on the next piece of the puzzle – how to approach your room rates.
Here are the key takeaways.


Recap – the domestic market

We delved deep into how you can appeal to the domestic market last week. Some key considerations include:
  • The importance of communication with customers
  • Being understanding & flexible in your approach to dealing with bookings of any kind
  • Considering the needs of each domestic segment
  • Remembering that this is an opportunity to showcase your hotel to new segments
  • Not forgetting your repeat guests

What the future holds 

We’ve also been continuing to monitor booking data very closely.
Since the 1st May (the day the recovery plan was announced by the government), bookings have almost doubled for those first 10 days in May compared to the last 10 days in April, with August seeing a particularly positive pick up. Still a small volume of bookings, but encouraging to see them grow! We’ve also seen much longer lead bookings. They go out as far as May 2021, with global traffic seeing a lift of about 14%.

It’s important for us to see what we can learn from others who are starting to come out the other end of this crisis.
Occupancy growth has continued throughout April. They are starting to see some normal patterns emerging and a continued solid pace.
Midweek bookings have improved, with Sunday being the slower day. Overall occupancy is tipping 35% now, up from a low of under 10%.


As Sweden’s ‘no lockdown’ strategy meant that hotels and restaurants were not actually obliged to close, there’s a lot we can learn from how hotels dealt with the situation, which still saw Swedes understandably uneasy and more cautious.

With an initial negative curve, occupancy growth continued for them throughout April, and they too are starting to see normal patterns emerging.

What are the important things we can learn from them?

  • Providing peace of mind
  • Promoting staycations to attract local travellers
  • Encouraging guests to book longer stays
  • Driving immediate revenue through gift vouchers
  • Building a strong community of followers

We recently sat down for a chat with Alexander Edstrom, CEO of automation company based in Sweden – you can have a listen to his take on the situation in Sweden versus elsewhere here.

In this competitive market, you need a rate plan that works for your hotel

There’s no denying it, like many other industries, you will be entering back into an incredibly competitive market. Occupancy levels will be down across the board – every hotel will be vying for guests! More predictable markets like corporate, group and conference will all be down, which is why the domestic market will be so highly sought after.
The first thing to remember is to try and avoid the ‘price wars’. Things like cancelled or re-booked events will all distort competitor rates – just always do what works for you. As we touched on last week, it is well worth showing potential return guests some love. Just remember that they, along with the majority of the domestic market you are trying to attract, will have new expectations, fears and limitations.
Keeping this in mind, you don’t want to confuse or mistakenly build unnecessary barriers between your guest and a booking. To avoid doing so, think about the following when you’re devising your packages:
Re-imagining rateplans
There will be an understandable reluctance to pre-pay for a booking. Advance purchase rates which were popular in the past need to be re-imagined. Think of these as ‘Early Bird’ offers – the discount is simply given for booking early. This will not only encourage the booking, but will also encourage a longer lead booking.
Keep it simple
For whatever you’re including in your rateplans, always bear in mind what will be operationally possible, and what guests will be comfortable with. Don’t overcomplicate.
High expectations
We all have a bit of cabin fever… the dreams of a few days away are strong, and expectations will be high! People will use their first trips away to de-stress, relax, let go, and you should think about how you can facilitate this experience for them. Sell it to them! Think along the lines of:
  • Your spa and leisure facilities
  • Your amazing rooms
  • Netflix
  • Self check in
  • In room dining
  • Car parking
  • Space / outdoor attractions around your property

Any kind of USPs that relate to making your guest feel particularly comfortable post Covid-19 should be highlighted.

Your rateplan alone will not be the deciding factor in their decision to book, nor would it have been in the past – but what’s changed is everyone’s needs and priorities, which include:
Fair Pricing
  • Heavily discounted pricing is not the answer. In fact, it will make a bad situation even worse
  • Rewards rather than sales would be a more positive approach – a ‘welcome back’ reward
  • However, be mindful of yielding that rate too far
  • There is also the operational side eg rooms will be more expensive
    to service and this needs to be factored in when you are calculating your lowest sell price
Health & safety measures 
Your health & safety measures and practises will need to be a new and crucial part of your communication. Content and information around this will play a huge role in your booking process, room type and also rateplan descriptions. It also needs to be a natural part of your website experience – it won’t be going anywhere, in fact, it will just become more ingrained if anything.
Don’t forget the basics
Load your rates through 2021 – as we’ve seen already, people are looking further ahead to book and will continue to do so.
In relation to rate parity, we are advising the same thing as always – but now it’s perhaps more important than ever – make sure you don’t have lower rates elsewhere!


Amplifying your messaging

Last week, we wrote about the importance of your marketing activity at a time like this. It’s no good having the perfect messaging and rateplan if no-one can see it.

Going a step further, here’s a breakdown of what we think your marketing campaign strategy should look like for the month of June:

Early June

  • Guests will start to consider booking a hotel stay and we expect to see an increase in demand, but we still advise you tread softly with your sales messaging at this point
  • Focus your messaging on “Stay Safe, See You Soon”, positive and helpful content on social media
  • Continue with your brand awareness
  • Prospect to in-market audiences via YouTube Bumper Ads, Google Display and Facebook
  • Increase your budget for ongoing campaigns: Brand Search & Hotel Ads

End of June  

  • At this point, we are expecting an increase in booking activity and it will be vital to invest in your book direct campaigns
  • Don’t forget the importance of safety messaging and the value of offers
  • Continue awareness campaigns if your budget allows
  • Increase budget for ongoing campaigns: Brand Search & Hotel Ads
  • Increase budget for remarketing campaigns on Google Display, Youtube and Facebook
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