Setting rates and pricing at your B&B cannot be random and unstructured. Recognising the importance of revenue management, you need to have a pricing strategy in place to make sure that you’re producing a steady stream of revenue and that you always have enough income to continue operating your property – preferably at a profit!
Here are five intelligent B&B pricing strategies that you can employ at your property:
1. Find the sweet spot
There’s always some budget-conscious travellers who are going to look for the cheapest price possible, and luxury travellers for whom money is no object. However, the vast majority of travellers are going to be middle-market guests who are looking for a nice room that offers good value.
To capture as many bookings as possible, set your basic room price to the cheapest market rate, while pricing your mid-level rooms at the basic rate of most of your competitors.
2. Appeal to traveller psychology
Psychological pricing has been used across all industries for decades, if not centuries. The reason this pricing strategy has proven to be timeless is because it is incredibly effective.
While a nice even rate of $200 per night may be easier for you, a consumer will find the rate $199 more appealing. It’s illogical but quite often accurate, and it also allows you to market rooms as ‘under $200 per night’. Keep this in mind as you are pricing your rooms, as it’s an easy way to capture a booking.
3. Match your prices to the season
Use forecasting and reporting tools to develop an understanding of seasonal trends at your property. When you experience high traffic volume, you may want to consider raising your rates since your rooms will be in high demand.
When you are in a slow season, you will want to lower your rates to entice visitors to stay at your property when the weather may not be as nice or when there are less activities available in the area.
Promotions and discounts can be useful in driving more traffic at these times, because there are always people looking out for good off-season deals.
4. Upsell with packages
With valuable packages, you can earn more per booking than you would if people just booked a basic room. Packages might include wine and chocolates, or a welcome basket that includes luxury toiletries, snacks and water.
Many people find packages to be a convenient way to add value to their experience and give themselves the feeling they’ve gained a bonus.
5. Beat the competition to the punch
Never underestimate the power of competing with other local accommodation that offer a similar experience to you. If you notice a change in their rates, you need to make a decision about whether you match them, beat them, or retain your current prices. If you find that travellers are often comparing you and another property on price, it may be a good idea to create a price-matching policy that will quickly sway them in your favour.
By utilising the right B&B strategies at your property, you will be able to book your rooms for the highest price possible at any given moment. This will allow you to generate the revenue necessary not only to survive but also to thrive in your local market.