What Are Your Pricing Strategies?

Travelers become “smarter;” they know how to shop around and find the best deal before making a hotel reservation. This MSNBC News video, for example, teaches travelers how to find the best price for a hotel room. Here are some of the advices: haggling, asking for the best available rate rather than a specific discounted price, being loyal to a brand, and joining a hotel’s social networking sites.

Many hotels use yield management or revenue management tactics to maximize revenues. Hotel revenue managers closely monitor the demand, price, room inventory, and distribution channels. They can manipulate one or more of those variables to “yield” the maximum revenue for a hotel. During the recession, I see all kinds of sales and promotion messages. Some hotels offer big discounts attached with a prepaid and non-refundable agreement. Other rely more on its loyalty programs and social networking sites. For example, they offer exclusive discounts to their Facebook fans and Twitter followers.

It is not difficult for hotels to find out which pricing strategy is more effective than others by simply looking at the number of reservations or revenue yielded by a marketing effort. Decades ago, hotels can easily use pricing strategy to target different groups of customers (i.e. different prices for different groups). With the Internet and social media, travelers can easily compare price and share the deals they found. I wonder how the Internet and social media affect a hotel’s pricing strategies. If you are a traveler, how do you find the best price for a hotel room? Do you think this video offers you some useful tips?

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