Pricing Strategy

How to Make a Good Pricing Strategy For Your Hotel: A Simple 3 Steps Process

Is Your Pricing Costing Your Hotel Money?

Catala Consulting got together with RoomPriceGenie to have a look at one of the most important factors for your hotel’s success – your pricing strategy.

And today, on a joint mission to provide dynamic pricing to everyone, we gift you our new service that makes getting started with pricing strategy even easier.

We present you our amazing new service called GenieIntelligence, also known as ‘The Email’. Together, we have managed to squeeze a great deal of our knowledge and a lot of data into a daily email that gives price recommendations, and we would love for you to try it.

We have priced thousands of hotels and seen the pricing of many thousands more. So, we thought we would share a few tips for better pricing with you. What would we do if we were to price your hotel?

Pricing Strategy Step 1: Setting up the next year ahead:

The first step of the pricing strategy is to make your best guess at prices for the year ahead. This is generally a combination of art and science, especially in the current circumstances.

To do this, you could first look on a seasonal basis at how your hotel performed in previous years in different months. What was the average price you charged, and how quickly did you fill up? If you filled up too quickly then you can try starting off higher this year. If you were below expectations, you may like to start your prices lower this time.

Then you would do the same thing for days of the week. How did you perform on Sundays and what adjustment would you like to make to your average price for Sundays compared to previous years? Ditto for all the other days of the week. You should create a regular weekly cycle of prices.

In current circumstances, history may not be the best guide, and you can look at what other hotels are charging. In particular, you should look at what the best-run hotels are doing. The Google Hotel Search tool is excellent for this. Simply click on a hotel and then click on the calendar for dates to see the prices for the future. You can use their patterns to inform your judgement.

Then lastly, think about special dates that you need to be higher. You can use the information from other hotels here too, as well as your own knowledge of local events and holidays.

You can use all of these forecasts to create a pricing pattern for your most popular room standard rate, then you can price all other rooms and rates from that with an offset.

All of this process can be assisted by revenue management software, such as that offered by RoomPriceGenie, but a traditional Excel spreadsheet will also do the job.

Pricing Strategy Step 2: Day-to-day management of prices:

At least once a week, but preferably every day, you should be checking what is happening. There are two important things to keep an eye on.

What are your competitors doing? This is very important in these times of uncertain demand. Are they raising or lowering prices? If you are caught on the wrong side you will either miss out on profits by selling too cheaply, or miss out on occupancy by not selling your rooms.

By keeping track of the prices of the best-run hotels you will make sure not to miss out on special dates you may have missed, or even an increasing booking trend for the whole season, as we saw in a lot of European hotels in summer 2020. The faster you spot these trends, the better.

It is also important to bear in mind that your potential customers are not looking at your pricing in a vacuum – they will be comparing your hotel to their other options. If you are not aware of your competition they can be a step ahead of you.

How is your own performance? You should be always aware of your own pick-up and occupancy for two reasons.

The first is that it signals when demand for your hotel is not what was previously expected. By being aware of this means you are able to change prices sooner to reflect changing demand.

The second is that by knowing how many rooms you have left to sell, you can change your price to try to sell that number. For example, if I have one room left to sell for 2 weeks time, I may like to charge $250 and if I have 40 left, I may want to only charge $150.

By keeping track of what your competitors are doing, how the best-run hotels are changing prices, and how you yourself are performing, you can keep your prices competitive and as high as possible.

Once again, technology can help here. By signing up for the free trial of the GenieIntelligence email, or indeed the full RoomPriceGenie product, a lot of this number crunching can be done for you.

Pricing Strategy Step 3: Promotions, restrictions etc:

The next step is good use of restrictions and promotions. There are too many possibilities to list here, but here are some examples:

  • On busy nights with quieter nights on either side, you may want to look at minimum stay restrictions rather than raising prices very high.
  • When your cheapest available room is no longer available, but you have a large number of the deluxe room, you can upgrade people to more expensive rooms to make the cheaper room available. Otherwise, you may miss out on guests who would book the cheaper room but not the more expensive one.
  • On nights where you are charging your minimum price but still not filling, you can try increasing your commission on the OTAs for those nights only to try to get your ranking higher.

We offer more tips in our free book of 49 tips for smaller hotels.


A Good pricing strategy can seem like a big deal, but when broken down into smaller parts it is both achievable and extremely valuable. Take the time to get it right, and you will be rewarded many times over.

And please don’t forget to sign up for the extended free trial we are offering all Catala Consulting users of our new and very special GenieIntelligence pricing email.

Scroll to Top


We’re sharing our checklist on Hotel Website Optimization. It’s a completely free guide which is packed with top strategies that we use to drive more direct bookings for our clients. Claim your copy today.