Rates vs. experiences: what do your guests want right now?
When fighting for the little business there is, it can be tempting to slash your rates to attract guests. But is that the only solution?
Our experts explain five things you need to be aware of when updating your room rates during the Covid-affected period.
Don’t blindly drop your rates. This approach may bring limited results in the very short term but recovering from aggressive price drops could take years, harming your profitability in the long run. Avoid joining (or starting) the race to the bottom. Demand is limited now and lowering rates will not increase it.
Stay true to your brand and price positioning. Be strategic and keep your branding and price positioning in mind if you decide to lower your rates.
- What does your property stand for?
- Who are your ideal guests?
- How would they perceive steep discounts or radical price reductions?
Answer these questions carefully before going ahead since drastic moves can change how customers perceive you – and may even damage your reputation.
Focus on value for money and experiences. Find other ways to offer your guests a bargain, instead of just cutting your rates. This can include creating packages that include several ancillary services like room service breakfast, parking and bicycle rental. Apart from providing extra value, this package can promise great experiences like a leisurely breakfast in the comfort of the room and a fun excursion your guests will remember and probably cherish more than a discount in the long run.
Use clear messaging. Let guests know exactly what they’re getting for their money. Competition for business will be fierce, so you will need to justify your rates, especially if your competitors are discounting.
Describe the benefits guests will get from booking with you and highlight the fun, memorable experiences you will give them. Focus on things many people missed in the past few months including quality time spent with loved ones, outdoor activities, exploring a new place or simply switching off in a relaxing environment.
Analyse your market and find your approach. In this unprecedented situation, nobody can accurately provide a roadmap for how to navigate a new business landscape. Use the suggestions above to get ideas for different approaches and find what works best for you in your specific market.