How does seasonality affect your hotel pricing strategy?

There was a time when hotel prices, especially with independent hotels were set based on seasons – a high, low and shoulder season. A lot of hotels still follow the practice, although, increasingly dynamic pricing has taken away the more static strict season-based pricing.

It is vital that hotels do not approach seasonality in blocks of time, and instead look at each day over a 365 day period in order not to lose revenue and occupancy opportunities.

So, if the traditional seasonal pricing model is no longer in vogue, what role do seasons need to play in your pricing?

Let us take a look at the key factors that affect seasonality.

  • School holidays in the source markets
  • Performance of economy in source markets
  • Demand for destination due to a new campaign or because of it being popularised in a movie or TV series
  • Weather at destination
  • Festivals and events

When planning your pricing strategy, it is important to list all possible dates over the next 12-18 months where your hotel/destination is likely to see higher than normal demand.

Outside of the normal ways of finding this information, you could also check airline fares into your destination from your source markets to identify anything that you may have missed.

It may be helpful to further break down seasonality into

– Single peak seasonality – most common and usually a single period of peak demand eg: Christmas
– Non-peak seasonality – does not follow the standard dates every year but driven by non-standard reasons eg: A new big event in town
– Dynamic seasonality – which can be variable by year eg: Easter holidays

Once you have this information, the next steps are to review a high-level impact on pricing for these periods based on which segments are likely to be most impacted.

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Tags: Boutique hotel guide, Pricing strategy

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