Adjusting Prices To Circumstances

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Highlands John's picture
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We change our room rates to help maximise income, which at times includes dropping rates to fill empty spaces in the diary.

I've had an email from someone that booked for August, back in feb. They've noticed that since they booked I've dropped the rates around their stay and are now asking for their rate to be dropped also. We've had a couple of emails back and forth and I've pointed out that if their airline to the UK dropped prices to fill empty seats they're not going to refund everyone else on the plane, I also said if I put my rates up cos it's very busy should I add the extra to their booking. 

I've offered a refund of their deposit and to cancel their booking as I'm a bit annoyed by this and would rather they didn't stay here, however if I do that they're probably gonna give us a bad review. I could just give them the lower rate and then just smile and pretend the conversation never happened when they're here.

Anyway, have others had this situation? Your comments would be welcome.

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We provide fast, easy booking directly from our website...seems this year we have had over 50% of bookings call and we take payment over the phone - which incurs a larger processing fee because we are doing this manually...

So we've had to adjust our prices due to this particular circumstance!

Have already raised the price a bit for next season starting Jan 1, 2019 to compensate for this...crossing fingers and hoping it's not a detriment...

 

notAgrandma's picture
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Northern Dreamer wrote:

We provide fast, easy booking directly from our website...seems this year we have had over 50% of bookings call and we take payment over the phone - which incurs a larger processing fee because we are doing this manually...

So we've had to adjust our prices due to this particular circumstance!

Have already raised the price a bit for next season starting Jan 1, 2019 to compensate for this...crossing fingers and hoping it's not a detriment...

It might be helpful to add the fee as a small percentage to the manual reservations instead of a set dollar amount in order to keep your rates low on your website. You could label it a "processing fee" or even "occupancy". People don't seem to notice additional fees on top of the rates (like Airbnb's recent "cleaning fee" and their pricy 12% "processing fee"). A few years ago I added a percentage on all of my reservations to cover credit card processing. I've only had 1 person ever question the line item.

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Lee2014's picture
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  My response-- "Oh, let me check on that."  (Swing around to the computer and check on the situation.)  "Oh that is for a smaller room (etc) so the price isn't so high.  Would you like to change rooms to get the discounted price?"

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notAgrandma's picture
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Genius! laughyes

gillumhouse's picture
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My rates stay the same every day unless it is Military/Police/Fire ot bereavement or Corp. My yield management is you take it or leave it - Himself could not remember the rates as it was (written down) so fluctuating prices could not happen. I just stick with the same until I do an increase and then have to learn the new rates.

Momma Smurf's picture
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Not using Calendar Mode as the main means of making a reservation helps prevent folks from knowing that dynamic pricing is being used. I still have Calendar Mode Available, but when people search dates, they only see Rooms that are still  Available and an Average Room Rate.  eg: my rooms during the week are less than the weekend, so a Thursday & Friday stay would be priced accordingly as an average, not showing the specific nightly rate for each day (or a possible discount thrown in).

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JimBoone's picture
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I suppose I'm odd, but I don't like adjusting rates downward for just that reason, don't want to feel I am taking advantage of the person that really wanted to stay with me as opposed to the one that chose me only on the basis of price or just dropped in at the last minute. I know I'm the odd one, rates go up and down all the time.

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Generic's picture
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We lower and raise rates from time to time. We try to avoid lowering rates where they could rebook. So, for example, if they have booked at Thursday through Sunday, we may lower the rate on Monday to Thursday but not touch Thursday through Sunday. 

But we do, from time to time give people the small discount if we really need to change rates. But we have a floor price we don't discount beyond. 

When people cancel in hopes of getting a better rate, we have sometimes put restrictions that don't allow the same booking into the system. Or worse.... actually put rates back up, if there is demand.

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Highlands John's picture
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We take a non-refundable deposit of 25% and we'd never reduce the price by more than that, so it's not worth people cancelling to re-book.

Generic's picture
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Is it worth the bad review to not reduce the price and have them post it on T/A?

Highlands John's picture
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No, I don't think so.

That's the conclusion I'm heading towards.

Generic's picture
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That's what I figured and that's why I do it.

Momma Smurf's picture
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Have been using Dynamic Pricing for years now.  My rates start dropping even sooner after last year's disastrous drop in occupancy.  And this year I've had a record breaking June and already booked more rooms in July than last year.  My rates are not posted specifically and can vary one day to the next depending upon availability and are different for types of rooms.  No one ever has figured it out, because if they did a search, their actual room wouldn't show because it was already booked.  

OnTheShore's picture
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What our terms say:

The rate specified on the invoice are the applicable rate a the time of booking. The rates we advertise are subject to change. By making your reservation, you agree that you are not eligible for any lower rates, discounts or other special deals advertised subsequent to the confirmation of the reservation, nor shall you be required to pay any increased rate above that specified in this contract.

What we actually do depends on the circumstances.

In your case -- are you holding on to any downpayment or deposit? what are your cancellation terms? how full are you for the specific dates that they've booked? are the reduced rates for the same room, or for different rooms?

If they want to cancel and re-book to try to get the lower rate, I would say they can't book the same dates, they have to book the dates for which the lower rate was advertised... Are their travel plans that flexible?

I might also say, "look, you thought this rate was a fair rate when you booked your stay; if you've changed your mind about that, you are free to try to find other accommodations"

Another analogy to use, if they buy something perishable from a store one week and then discover that the next week that item is discounted 20%, do they go back to the store and ask for the discount to be applied to their previous purchase? (Although I guess maybe there are people who would try that....?)

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Highlands John's picture
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OnTheShore wrote:

What our terms say:

The rate specified on the invoice are the applicable rate a the time of booking. The rates we advertise are subject to change. By making your reservation, you agree that you are not eligible for any lower rates, discounts or other special deals advertised subsequent to the confirmation of the reservation, nor shall you be required to pay any increased rate above that specified in this contract.

Definitely going to add something like that to my Ts & Cs thank you.

OnTheShore wrote:

I might also say, "look, you thought this rate was a fair rate when you booked your stay; if you've changed your mind about that, you are free to try to find other accommodations"

That's where I'm heading, basically this has infuriated me so I don't want them here. 

The other point I've already made to them is..... if at some point I raise my room rates about what they booked are they happy for me to add the extra to their booking........ that ignored that point.

The other point which I haven't used yet is..... if I now give them the new rate does that then mean I have to give everyone else at that time whose already booked the discounted rate, in which case offering a last minute discounted rate to fill empty rooms is going to cost me more than leaving the rooms empty.

Morticia's picture
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We don't usually lower rates, just raise them. Expedia has taught people to keep checking prices. 

You're correct that the airline won't refund them, but they can get the lower rate by cancelling the tickets they have, paying the fine, and then hoping the seats are still available when they try to rebook.

How much lower are the rates?

There is nothing you can say to this person that is going to make them happy they are paying more than the next guy.

What I might do is raise your prices back up where they were and offer a discount on the phone to someone who calls. Price checker understands then there are no discounts that week. And you can tell him you understand what he's saying so you've put the prices back up.

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Highlands John's picture
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Morticia wrote:

There is nothing you can say to this person that is going to make them happy they are paying more than the next guy.

Much as it pains me, the only answer to this is to give them the lower rate. It is only £30 we're talking about.

Morticia wrote:

What I might do is raise your prices back up where they were and offer a discount on the phone to someone who calls. Price checker understands then there are no discounts that week. And you can tell him you understand what he's saying so you've put the prices back up.

Going forward I think that's the answer, rather than change my room rates I should post last minute special offers.

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