Aiming High

Experts explain how they target high occupancy rates by defining effective pricing strategies, leveraging the right revenue management tools and analysing yield management approaches.

- Vinita Bhatia

For many hotels, developing effective pricing strategies remains a complex issue. The emergence of revenue-management systems has aided in demystifying pricing practices and has helped hoteliers understand the demand characteristics of the various grades of rooms at their property. We speak to various industry experts to understand how they balance their occupancy rates to effectively maximise their revenue. We also delve into whether they have a process to arrive at optimised, time-sensitive and customer-targeted pricing strategies to manage their room inventory and how they monitor the performance of these processes in view of estimated demand and actual occupancy.

What metrics do you follow to efficiently assess the room occupancy rates vis-à-vis the rate offered to guests?

Vinay Singh: Balance in hospitality is all about having an optimal mix of the respective market segment and every hotel decides what segmentation fits their market and property. Our team defines a pricing strategy for each market segment to maximise revenue on a daily basis with weekly and monthly broadcasts. The total room revenue is bifurcated to define target clientele by taking into consideration factors such as price, length of stay, day-of-week patterns, and booking trends. 

Amirtham Umapathy: Forecasting plays an important role in occupancy-based pricing as it is assessed on historical data, current and future trends of the hotel as well as of the market. We do a forecast by market segment (for example transient, corporate, travel agent, MICE, and airline), which help us in determining accurate pricing by segment as the trend in each segment varies during different periods of the year.