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| We are increasing our Hotel rates. Is it brave or foolish ? | Views: 709 |
| Sep 12, 2008 1:49 am | | We are increasing our Hotel rates. Is it brave or foolish ? | # |
Mary Smith marysmithjunior@googlemail.com | |
1. We are increasing our hotel rates by 100%-200% times for most rooms.
2. The other hotels in the neighborhood are keeping their rates steady due to the recession fears.
Our hotel was underpriced because
1. We did not change our rates for the last 3 years
2. Newer hotels that were built came in with higher rates
3. Our hotel's location is the best
4. Other hotels charged higher than us, and successfully with much higher occupancy
We are now focussing on the hotel.
1. We have invested and renovated all rooms to a four star experience
2. We have added new facilities in the hotel to keep up with the times
3. We are improving the service quality
We plan to offer our repeat guests a discount for the first year.
What do you think will be the impact of our rate increase ?
How best can we increase our revenues ?
Best,
Mary
Private Reply to Mary Smith marysmithjunior@googlemail.com |
| Oct 03, 2008 6:49 pm | | re: We are increasing our Hotel rates. Is it brave or foolish ? | # |
Sudha Gupta | | Hi Mary
At one hand it may seem justified to upgrade hotel's position in market by renovating property, improving look and adding facilities, on the other hand a sharp increase to 100-200% is something no traveler is ready to buy.
If they are used to of a hotel as certain kind, they do not expect it to have 100-200% increase next year
Leisure traveler is not repeating visit to same destination/city every year. Usually its business traveler who has no option.
any biz traveler chooses a certain hotel mostly because:-
-proximity that serves his work/ business interest
-budget that suits either his daily allowance or company's budget for his travel
if the budget does not suit him with the sharp increase, he is likely to look for another option
Good news is that slowly you may be able to spread the word about better standards and attract executives who can pay higher and ditto for leisure clients.
Best is not to try to recover your expenses in very first year after you have made them. Go slowly and don't let client feel the sudden price hike
Whatever you may decide to do, don't cause disappointment to either your Old clients or new ones. Deliver what you claim the price for.
Warm regards....Sudha
Private Reply to Sudha Gupta |
| Nov 17, 2009 9:49 am | | re: We are increasing our Hotel rates. Is it brave or foolish ? | # |
Jennifer | | HOW does this year look ?
Private Reply to Jennifer |
| Nov 17, 2009 1:30 pm | | re: re: We are increasing our Hotel rates. Is it brave or foolish ? | # |
Randy DeVaul | | I agree with Sudha. Previous guests won't likely come back with doubling the price; new guests will hesitate as you already have a reputation in that area for a particular pricing. You will almost have to change your name or market yourself as the 'new' destination to attract a different client level - you will no longer appeal to your previous client level.
Is this the right timing for you to increase? Great question. I believe you are good for an increase; you are NOT good for doubling or tripling your rate without re-shaping your 'brand.' And doing that will cost more initially than the benefit of the rate increase.
So - strategically - you are probably ok to make a 15-20% rate increase for the short term where you can begin to SHOW to your guests that you are worth a great value. If you go higher than that, you will need a long-term strategy to re-brand and attract a different type of client. Don't try to compete with the newer hotels (and rates) unless you have at least a matching name recognition or EXCEPTIONAL service.
Good luck in your endeavors and challenges. RDPrivate Reply to Randy DeVaul |
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