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How to adjust property pricing to meet the needs of your guests?
At a time when various regions of the world experience business recovery and growing demand for travel, a very important element of your strategy should be choosing the right pricing policy and booking conditions. In the face of an uncertain situation and changing restrictions, guests expect greater flexibility to plan their trip with peace of mind.
In this guide, we will focus on the topic of selecting the right property pricing, which will help both in the short-term, in the face of the current situation, and, in the long-term, in maximizing the profits from short-term rental.
Let's start with the basics
Your pricing strategy should be based on 3 fundamental steps:
- Building the foundations - selecting of rate plans which gives travelers a choice and flexibility, and allows you to reach the largest possible audience
- Proactive measures - setting long-term goals that will gradually increase occupancy, as well as improve coverage and visibility of the offer
- Reactive measures - adjusting prices to the "here and now" situation, which will result in a short-term increase in occupancy
Create an offer that meets the needs of guests
The most basic operation will be to define the base in the form of rate plans. To attract a diverse group of customers, optimize your offer and provide diverse booking conditions. What offers are the most desirable?
- Flexible offer - the most expensive and the most frequently booked offer, which also gives the greatest flexibility. Biggest Advantage: higher chance of conversion.
- Non-refundable - usually a cheaper and more restrictive offer that allows you to increase the occupancy, especially for tourists with a certain itinerary who opt for a lower price, giving up flexibility. It is characterized by a low cancellation rate due to strict rules. Biggest advantage: fewer cancellations.
- Early bookers - attractive offer for guests booking in advance. Selected by travelers who prefer planning and booking their stay in advance. Biggest Advantage: ensuring more advance notice and fewer cancellations from customers who more committed to their plans.
As you can see, each offer has its advantages. The most optimal policy combines all 3 offers. According to data presented by our partner, Booking.com, a property with all three rate plans will average a 5% increase in bookings, an 11% increase in visibility and a 9% decrease in cancellations, thanks to adjusting to different booking preferences. The variety of choice and increased flexibility translates into a greater likelihood of booking your property. Of course, the choice of policy depends on your business plan and this solution may not be desirable in a short- or long-term development strategy of every property. However, it is worth remembering that it improves your visibility against the competition in OTA and increases the attractiveness of direct sales.
The key pros of using a variety of plans:
- more advanced bookings
- no need to adjust the policy and apply very high discounts to fill the last minute orphan days
- reaching 3 groups of customers at the same time - i.e. travelers planning their travel in advance, guests expecting flexibility and peace of mind, and customers looking for last minute offers who are not bothered by non-refundable offers
We would like to remind you about our new feature - use of multiple rate plans in integrations with Channel Manager, which allows you to easily link several rate plans with different conditions with Booking.com and other services.
Expand your knowledge thanks to the Opportunity Center
Based on the advice of experts from Booking.com, available at Opportunity Center, and our experience of working with thousands of properties, we have prepared a list of the most popular suggestions on price management this season:
- Maximize the number of bookings by changing the rules of your flexible rate plans - attract customers by extending your free cancellation period. At Booking.com, you have the option to change your policy to the "1-day flexible". You can set this offer by activating the appropriate option from the Booking.com Opportunity Center and in direct sales in IdoSell (Prepayment, cancellation and refund policy in Offer > Rate plans).
- Allow children - increase your visibility among families by updating the rules and allowing staying with children at your property. You can set this option in the Booking.com Extranet and in direct sales in IdoSell (Offer> Sales configuration).
- Set prices for children - did you know that family stays are 28% longer and that the prices of their rooms are 27% higher than for couples and solo travelers? You can set this option in the Booking.com Extranet and in direct sales in IdoSell (Child discount assigned to the plan in Offer > Reduced prices, markups and discounts).
- Promote Early Booking Offer - with the Early Booker Offer you can increase the number of first-minute bookings and thus secure your revenue. This offer can also increase your visibility among Booking.com customers. Early Booker Offer reduces cancellations as guests are encouraged to stay at a competitive price. You can set this option in the Booking.com Extranet and in direct sales in IdoSell (Offer> Reduced prices, markups and discounts as a "First minute" discount assigned to the rate plan).
To discover more tips and possibilities tailored to your property, see Opportunity Center available in your IdoSell panel (Channel Manager> Booking.com). The Opportunity Center is available to any Booking.com-integrated property and includes advice from our Partner.