three pricing approaches that improve your strategy

Three Pricing

Approaches that

Improve Your Strategy

© Copyright Integrated Decisions and Systems, Inc. (IDeaS – A SAS COMPANY)

One of the most important decisions

every hotel organization needs to

make is establishing their public

pricing structure.


For some hotels, this can be an

overwhelming challenge – they

might be new to their market,

constrained by parity commitments,

or simply looking for an approach

that brings better revenue results

than their existing one.


For other hotels, they might have a

desired pricing strategy in mind - but

their technology can’t successfully

deploy it.


No two hotels are identical to one

another - and a one-size-fits-all

pricing approach does not improve

revenue performance for every

hotel.


Here are three analytically-

advanced pricing methodologies

available for today’s hotels


Daily Pricing

Daily Pricing is a pricing strategy where a different rate is

charged for each night of a guest’s stay. It is based on

the demand and price sensitivity for a one night stay on

each night – meaning that each night is priced

independently of any others.

Daily Pricing is generally the simplest pricing approach

to implement across all of a hotel’s selling systems and

channels; however, it may not provide the ability to

capture the most optimal revenues based on the

demand by the arrival date and the guest’s length of

stay. “BAR by Day” or “Daily BAR” are two alternative

names that also refer to this specific pricing approach.

1


2 Length of Stay (LOS) Pricing

This pricing approach offers rates that are based on

both the arrival date and the total duration of a guest’s

stay. This option (commonly referred to as “BAR by LOS”)

considers the demand and price sensitivity for each

arrival date based on the duration of stay – meaning

that one rate is calculated by evaluating all of the

desired nights in conjunction with one another.

An advantage of Length of Stay pricing is that guests

are offered one simple rate for their entire stay – based

on their arrival date and total reservation night length.

This can help many hotels achieve optimal revenue

performance since its rate is based on specific patterns

by arrival date and length of stay.


3 Daily Continuous Pricing

Daily Continuous Pricing provides hotels with the most

flexibility within their desired rate structure. It employs a

similar methodology as Daily Pricing; however, there is

a range of available rate values for each room class.

Daily Continuous Pricing brings similar benefits to Daily

Pricing; however, it provides hotels with even more

flexibility within their desired rate structure. Hotels

identify their minimum and maximum public rates for

an analytical, continuous calculation of the rate value

that drives optimal revenue. It allows hotels to get as

close as possible to the exact analytically optimal

price and adheres to any marketing rules (such as

rates that must end with .00 or .99.)


Access our white paper on these

three pricing methodologies, who

they work best for & the

considerations all hotels need to

evaluate before establishing their

public rate structure.

http://ideas.com/tools-resources/white-papers/


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three pricing approaches that improve your strategy

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