Why is discount pricing used in hotels?
Hoteliers use discount pricing to fill rooms during slow seasons, attract loyal customers, or to stay competitive when market conditions change. By understanding and strategically using discount pricing, hotels can maximize revenue, improve guest satisfaction, and enhance their overall brand image.
Examples of Discount Pricing Strategies
Each discount pricing strategy serves a unique purpose and meets different market needs. Here’s a closer look at how these strategies can be deployed:
- Number of discounts. Offer lower rates for guests who book multiple rooms, ideal for group travelers or event attendees. Example: 10% off for booking 5 rooms or more.
- Length of stay discounts: Encourage longer stays by offering lower rates per night. Example: 15% off for stays of 3 nights or more.
- Loss leader discounts: Offer one service at a discount to boost sales of other services, such as discounted room rates to promote spa services. Example: Book a room at 20% off and receive a coupon for 50% off spa services.
- Seasonal discounts: Offer special rates during off-peak seasons to attract guests. Example: Winter vacation packages with 25% off.
- Last-minute deals: Offer discounted rates for last-minute bookings to fill empty rooms. Example: Book within 48 hours of arrival and get 30% off.
- Package discounts: Consider package room rates with additional services or amenities at a discounted price. Example: A romantic package including a room, dinner, and spa services at 20 percent off.
- Direct Booking Discount: Encourage guests to book directly through the hotel website by offering a discount. Example: Book directly and save 10% on your stay.
- Loyalty program discounts: Offer exclusive rates or gifts to your loyalty program members. Example: Loyalty members receive a 15% discount on room rates.
- Non-refundable rate discounts: Offer lower rates to guests who want to pay in advance without a refund option. Example: Book now and pay in advance to save 20% on your room rate.
- Event-based discounts: Offer special rates during local or global events or holidays. Example: Festival special, book during the event and get 15% off. Partner discounts: Partner with local businesses or online platforms to offer reciprocal discounts. Example: Show your room key at partner restaurants to get 10% off your meal.