In today’s competitive hospitality market, small and independent hotels often feel like they’re competing with one hand tied behind their back. Without the massive teams and resources of a major chain, implementing sophisticated strategies like dynamic pricing can seem out of reach. But what if we told you that you don’t need a complex system or a team of analysts to see a significant boost in your Average Daily Rate (ADR)?
At Prosper, we believe that success for small hotels comes from a combination of strategic thinking and practical, hotel-focused execution. Our Senior Director of Revenue Management, Brian Lueb, provides three quick wins you can implement today to start capturing more revenue.
Quick Win #1: Understand Your "Why" and Your "Who"
Before you adjust a single price, you need to understand two key things: why guests choose you and who your ideal guests are. Small hotels have a unique advantage: personality and authentic connection. Your “why” could be your incredible complimentary breakfast, your prime location near a local attraction, or the personal touch your staff provides.
Your “who” is the guest who values these unique qualities. Are they business travelers seeking a quiet, comfortable stay? Are they families on a weekend getaway? By defining your niche, you can stop competing on price alone and start selling on value. Once you know who you’re targeting, you can tailor your pricing to what they’re willing to pay for that unique experience, not just a bed for the night.
Actionable Tip: Survey past guests or read recent reviews to identify recurring compliments. This is your “why.” Use this information to create a guest persona and focus your pricing strategy on capturing that specific market.
Quick Win #2: Ditch the Static Rates—Embrace Demand
The old model of “high season” and “low season” rates is a relic of the past. Today’s market is fluid, and demand can spike unexpectedly. Dynamic pricing at its core is simply adjusting your rates based on real-time market conditions. You don’t need a fancy algorithm to start.
Start by tracking local events, holidays, and even city-wide conferences. A big concert or a trade show can create a sudden surge in demand, and your rates should reflect that. For a small hotel, this might mean manually checking your competitor’s rates once a week or using a simple rate shopper tool to stay informed. Don’t be afraid to raise your prices when demand is high. Guests who are booking last-minute during a sell-out event are not as price-sensitive as those booking months in advance.
Actionable Tip: Create a simple calendar of key dates for your market—local festivals, school breaks, major sporting events. For these dates, set a higher rate and don’t budge. Watch your occupancy and ADR climb as a result.
Quick Win #3: Leverage Different Stay Lengths and Booking Windows
A one-size-fits-all rate is another missed opportunity. Guests who book far in advance are often more price-sensitive and willing to commit to a better deal. Conversely, a guest booking a last-minute weekend stay might be willing to pay a premium for convenience.
Consider implementing simple length-of-stay restrictions or offering discounts for longer stays. For example, a “Book 3 Nights, Get 10% Off” promotion can entice guests to extend their trip, increasing your total revenue. Similarly, during slow periods, you might offer a “Sunday Saver” rate to encourage guests to stay an extra night when your occupancy is typically low.
Actionable Tip: Review your booking data to identify your average length of stay and booking window. Use this insight to create tiered pricing strategies. Offer a higher rate for single-night, last-minute stays and a more competitive rate for guests who book further out or for longer periods.
Dynamic pricing isn’t about complexity; it’s about being smart and strategic with the information you already have. By focusing on your unique value, responding to demand, and leveraging different booking patterns, your small hotel can compete with the big chains and start capturing the revenue you deserve.
Ready to take your revenue management to the next level? Connect with our experts at Prosper Hotels and let us help you unlock your hotel’s full potential.
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