Raising rates

[bbinnsitters]

I am trying to help an owner raise her rates - she has been in business for 7 years and has never done so. She has kept her prices the same as the other B&B in town so they "aren't competing"...I told her there was no competition - she is the better of the two by a long shot! I told her she needs to set a date - I assume Jan. 2012 would be a good starting point, but could she start earlier? Should she post it on her website that rates will change? Any advice would be greatly appreciated.

 

[Paradise]

Heck yes. She can change them any day that she likes. When we have changed rates, of course we honored the old rates for those with prior bookings. However, she can certainly make a change-effective immediately-period.

 

[Breakfast Diva]

If she has online reservations, she can just increase the rates on any date she wants. When they look at the availability calendar, they will see and book the room at the new rate. Very simple and easy to do. Just change the rates on the rooms pages.
I would not mention anything about raising rates. Just do it. The rooms that are already booked will stay the rate they were booked at.

 

[Generic]

She can raise rates at any time, just honour the previous rates for those who have booked.
And she can adjust dates or times of the year at any time. She should look at her bookings and see when she is more full and when she is less full. Is she booking certain days of the week more often? Certain days less often. You raise those that are booking more often (in some places it's weekends, in others it's weekdays or particular seasons.) Hotels do it all the time, if they aren't booked, they lower them. If they are booking too quickly, they raise them.

 

[Alibi Ike]

She should first calculate what the rate change will be. Is she going to jump the rates up or creep them up? How far behind is she? Is $5 going to be a big enough raise? Is she thinking more like $25? You can also tell her that if the prices go up she needs to be sure her website reflects ALL the 'freebies' included in that.
Yes, she is 'in competition' for guests but if her product is substantially better and she can prove it, guests will book at the higher price.
Have you stayed at the other place? Worked there? Do you have insider knowledge that your innkeeper's place is better than the other place?
There is no need to announce rate changes, just do it. Her rates for tomorrow could be higher than today's and who's to know? She needs to honor any reservations made at the old price. We never announce changes, just make sure all the web marketing reflects the changes. Make a list of all the directories she's on and be sure all of those ranges get changed. Ditto her own website.
Now, if the question is really, 'How do I tell the long-time repeats the price has gone up,' that's something else altogether. Most of them have gotten used to the old pricing. If they really like the place they'll understand a raise in the price and there is no need to warn them in advance. If it is a big jump and the guests have been coming forever, she could do a tiered pricing just for them (unannounced). She could jump them half this year and half next.
If she is hearing comments that imply she is not charging enough then it's time!

 

[bbinnsitters]

Funny - after I posted this I went into her website and looked at how it was set up and I thought "why doesn't she just input the new price whenever she wants!" no fuss, no muss - thanks guys! I'll see what I can do! She also has a room that rents for $90 with the twin beds, but $110 if she changes it to a King - I told her you still have the hassle of making the bed...just make it $110 for either!

 

[bbinnsitters]

She should first calculate what the rate change will be. Is she going to jump the rates up or creep them up? How far behind is she? Is $5 going to be a big enough raise? Is she thinking more like $25? You can also tell her that if the prices go up she needs to be sure her website reflects ALL the 'freebies' included in that.
Yes, she is 'in competition' for guests but if her product is substantially better and she can prove it, guests will book at the higher price.
Have you stayed at the other place? Worked there? Do you have insider knowledge that your innkeeper's place is better than the other place?
There is no need to announce rate changes, just do it. Her rates for tomorrow could be higher than today's and who's to know? She needs to honor any reservations made at the old price. We never announce changes, just make sure all the web marketing reflects the changes. Make a list of all the directories she's on and be sure all of those ranges get changed. Ditto her own website.
Now, if the question is really, 'How do I tell the long-time repeats the price has gone up,' that's something else altogether. Most of them have gotten used to the old pricing. If they really like the place they'll understand a raise in the price and there is no need to warn them in advance. If it is a big jump and the guests have been coming forever, she could do a tiered pricing just for them (unannounced). She could jump them half this year and half next.
If she is hearing comments that imply she is not charging enough then it's time!.

All good points Alibi! I think going from $90 to $100 she'll feel comfortable with (then I told her she could afford cleaning help!) She and her hubby have been doing everything for 7 years! Yes, I have worked at both places and hers is far superior in every way.

 

[Alibi Ike]

She should first calculate what the rate change will be. Is she going to jump the rates up or creep them up? How far behind is she? Is $5 going to be a big enough raise? Is she thinking more like $25? You can also tell her that if the prices go up she needs to be sure her website reflects ALL the 'freebies' included in that.
Yes, she is 'in competition' for guests but if her product is substantially better and she can prove it, guests will book at the higher price.
Have you stayed at the other place? Worked there? Do you have insider knowledge that your innkeeper's place is better than the other place?
There is no need to announce rate changes, just do it. Her rates for tomorrow could be higher than today's and who's to know? She needs to honor any reservations made at the old price. We never announce changes, just make sure all the web marketing reflects the changes. Make a list of all the directories she's on and be sure all of those ranges get changed. Ditto her own website.
Now, if the question is really, 'How do I tell the long-time repeats the price has gone up,' that's something else altogether. Most of them have gotten used to the old pricing. If they really like the place they'll understand a raise in the price and there is no need to warn them in advance. If it is a big jump and the guests have been coming forever, she could do a tiered pricing just for them (unannounced). She could jump them half this year and half next.
If she is hearing comments that imply she is not charging enough then it's time!.

All good points Alibi! I think going from $90 to $100 she'll feel comfortable with (then I told her she could afford cleaning help!) She and her hubby have been doing everything for 7 years! Yes, I have worked at both places and hers is far superior in every way.
.

$10 isn't enough for all the aggro she's putting herself thru thinking about it! Just do it.

 

[EmptyNest]

Don't announce anything. DOn't make a big deal and call attention to a rate increase. Just do it!

 

[Generic]

Funny - after I posted this I went into her website and looked at how it was set up and I thought "why doesn't she just input the new price whenever she wants!" no fuss, no muss - thanks guys! I'll see what I can do! She also has a room that rents for $90 with the twin beds, but $110 if she changes it to a King - I told her you still have the hassle of making the bed...just make it $110 for either!.

Put it up. Hardly anyone knows how to use the way back machine. They will never even know that she put up the prices. And if it's a big amound, creep it up, slowly over a few weeks rather than all at one time. No need to give notice, just start doing it.

 

[seashanty]

no rate increase in SEVEN years? it's way past time. so many innkeepers stress over this.
i'd go up $25 across the board. no announcement. i'm not a fan of creeping them up little by little.
whatever amount she increases .... if (when) old faithfuls ask/complain about the rate increase, she can offer a special guest price reduction 'just this once' 'just for them' if she wants to.
the rates steadily increased where i used to be. a few guests would book at the other place and tell me it was because of the lower price. sometimes i'd match the other place's price if they were on the fence, but not often. many guests just booked with me, perceiving and telling me that my place cost more but was 'nicer'.
big caution as someone mentioned ... already existing reservations at the old rate MUST be honored.

 

[Joey Camb]

Im with the other guys just do it. we put everything up $10 a year cos thats roughly what costs go up anyway to keep us balanced. But its supply and demand busy time when everyone wants a room here prices goes up. Slow time when nothing is going on then prices go down. We've been super pleased as we had an offer through from a national newspaper to do an add with them for free. (ie guest collects tokens and gets a discount with you but no commission) got about 5 4 night stays in August out of it so far and cost me nothing! its why I read the guff they send me when most chuck it out!

 

[Aussie Innkeeper]

Sue - is this innkeeper paying the same for anything today that she was 7 years ago? I doubt it! Why do we innkeepers get so wigged out about raising rates?
I haven't raised my rates in 4 years, but only because we're in the top range of those here in our area. I'm waiting for the rest of them to catch up!

 

[One Day]

Today is July 1..........as good a time as any
NO.......announcement
Or......if she wants to get bookings in now......you can do an annoucement that effective August 1, 2011......rates will increase......book now for your stay in 2011 to avoid the increase effective 8/1/11

 

[JBloggs]

I think it depends on the B&B and the location.
"She also has a room that rents for $90 with the twin beds, but $110 if she changes it to a King - I told her you still have the hassle of making the bed...just make it $110 for either!"
I have seen B&B's in old run down houses with no nice landscaping or B&B-esque lot/land that should not be getting $110. They should not be that way at all, and in fact not all B&B's should be B&B's! So for that, hard to answer without seeing the inn, so SueEllen that is where your expertise comes into it. Would YOU pay more for her rooms?
Also how does the website look? Does it "show rooms" worthy of an upgrade in prices?
I agree with the others, if she wants to raise them, then just raise them. Put the ALREADY BOOKED reservations in at the NEW HIGHER RATE and make them show as a $10 discount (or whatever the new price increase is)

 

[Breakfast Diva]

Today is July 1..........as good a time as any
NO.......announcement
Or......if she wants to get bookings in now......you can do an annoucement that effective August 1, 2011......rates will increase......book now for your stay in 2011 to avoid the increase effective 8/1/11.

Today is July 1..........as good a time as any
NO.......announcement
Or......if she wants to get bookings in now......you can do an annoucement that effective August 1, 2011......rates will increase......book now for your stay in 2011 to avoid the increase effective 8/1/11

Sorry One Day, I gotta disagree. NO ANNOUNCEMENT, JUST DO IT. Don't call attention to it. Most people will never even notice
I think that all b&b rooms deserve to be at least $100 per night, no matter where your location is. Especially considering that a lot of places offer some sort of discount. I just don't see how it's worth it to do all this work for little money! I'm wondering how she can afford an interim innkeeper if her rates are so low?!?!?!
Edited to add: All quality b&bs deserve to be at least $100 per night.

 

[Joey Camb]

Sue - is this innkeeper paying the same for anything today that she was 7 years ago? I doubt it! Why do we innkeepers get so wigged out about raising rates?
I haven't raised my rates in 4 years, but only because we're in the top range of those here in our area. I'm waiting for the rest of them to catch up!.

im paying 40 cents more for beans than I was last month!

 

[Alibi Ike]

Today is July 1..........as good a time as any
NO.......announcement
Or......if she wants to get bookings in now......you can do an annoucement that effective August 1, 2011......rates will increase......book now for your stay in 2011 to avoid the increase effective 8/1/11.

Or......if she wants to get bookings in now......you can do an annoucement that effective August 1, 2011......rates will increase......book now for your stay in 2011 to avoid the increase effective 8/1/11

A lot of places around the state do that. 'Book now before rates go up.' Or, 'Book next year at this year's rates.' It gets a lot of reservations on the books but if you don't do it to get the deposit money in the slow season you may end with a lot of cancels from 'sale' shoppers who change their minds.

 

[Alibi Ike]

I think it depends on the B&B and the location.
"She also has a room that rents for $90 with the twin beds, but $110 if she changes it to a King - I told her you still have the hassle of making the bed...just make it $110 for either!"
I have seen B&B's in old run down houses with no nice landscaping or B&B-esque lot/land that should not be getting $110. They should not be that way at all, and in fact not all B&B's should be B&B's! So for that, hard to answer without seeing the inn, so SueEllen that is where your expertise comes into it. Would YOU pay more for her rooms?
Also how does the website look? Does it "show rooms" worthy of an upgrade in prices?
I agree with the others, if she wants to raise them, then just raise them. Put the ALREADY BOOKED reservations in at the NEW HIGHER RATE and make them show as a $10 discount (or whatever the new price increase is).

I agree with the others, if she wants to raise them, then just raise them. Put the ALREADY BOOKED reservations in at the NEW HIGHER RATE and make them show as a $10 discount (or whatever the new price increase is)

This I wouldn't do. Just because someone will argue the point that their confirmations says '$90' and they want this new 'discount' off THAT. It would happen. You know it would... I wouldn't even mention that the rates went up and 'I kept your room at the rate you booked' because most people would say, 'Damn straight you kept my rate at what I booked.'

 

[Generic]

Sue - is this innkeeper paying the same for anything today that she was 7 years ago? I doubt it! Why do we innkeepers get so wigged out about raising rates?
I haven't raised my rates in 4 years, but only because we're in the top range of those here in our area. I'm waiting for the rest of them to catch up!.

im paying 40 cents more for beans than I was last month!
.

Serve beans only in the winter... saves on the heating bills