I'm not religious about it. Example - I don't reduce rates online to pull in more bookings. I do increase rates when certain dates are filling quickly.
The way I look at it is that the money raised with higher rates offsets any discounts repeat guests get.
We do a 'seat of the pants' rate in the shoulder season for walk ins. It generally takes a couple of days to hit the correct 'no hassle' rate. (I don't put that rate online because it would make us the lowest priced inn in town. That raises flags with Bookers.).
Morticia said:
I'm not religious about it. Example - I don't reduce rates online to pull in more bookings. I do increase rates when certain dates are filling quickly.
The way I look at it is that the money raised with higher rates offsets any discounts repeat guests get.
We do a 'seat of the pants' rate in the shoulder season for walk ins. It generally takes a couple of days to hit the correct 'no hassle' rate. (I don't put that rate online because it would make us the lowest priced inn in town. That raises flags with Bookers.)
Morticia, interestingly I just had this conversation with my business partner and she doesn't necessarily think having the lowest rate is a problem. I am curious why do you think the lowest price would raise flags? My thinking in this whole exercise is if the lower price is the right price based on market segment and demand at the time then the other inns are overpriced. Just curious what your line of thinking is.
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JerseyBoy said:
Morticia, interestingly I just had this conversation with my business partner and she doesn't necessarily think having the lowest rate is a problem. I am curious why do you think the lowest price would raise flags? My thinking in this whole exercise is if the lower price is the right price based on market segment and demand at the time then the other inns are overpriced. Just curious what your line of thinking is.
If you are not looking for lowest price as your basis for selecting a particular property and you see inn x offers pretty much what inn y offers at a $150 discount do you not ask yourself, "what's wrong with inn x?"(It probably depends on your world view - some people would ask who do they think they are at inn y?)
That's what we've heard at the door when I won't come down $50 and I take the guest to the street and point at the place that will give them a room for what they want to pay - what's wrong with that place?
If guests see the going rate for an area is no less than $150 across the board and I'm the place offering rooms at $125 (which seems to be the shoulder season rate that gets zero push back) they think there's a reason I can't GET $150.
Now, if my reviews were excellent, I could charge whatever I wanted and there'd be no questions. But I have guests who hate me so much they write new bad reviews every 6 months under new user names to keep us at the bottom of the list on TA. That does have an impact on sales and guest perceptions.
BTW, I've been inside every inn here in town that plays the same game I do. There are a couple that play by their own rules so I don't count them in my pricing. I know what you're getting at $299/night. As well as the places that are $149/night. We price ourselves based on how much grief are we willing to handle when guests just spent $99 at the beach and are now spending $100 more/night to stay here. We're not super fancy, we're pretty much laid back and not everyone wants to spend close to $200/night excluding taxes if they're not getting gold plated bath fittings. But it is what it is right here in peak season.
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