Why You Should Implement Seasonal Pricing For Hotels

What is hotel seasonal pricing and its benefits?

As a hotelier, you want to have a steady business throughout the year. You want to make profits during peak season and increase revenue and occupancy in the off-season. So, how do you go about doing that? By setting seasonal pricing rates.

What is seasonal pricing?

Seasonal pricing is the rates fixed during specific periods in a year like a peak season, off-season, and shoulder season which are slightly different from the standard basic price. In short, seasonal pricing is adjusting rates according to the market demand in order to have a steady business throughout the year. Here are a few benefits of having seasonal pricing:

  • Gaining an edge over your competitors during these particular seasons.
  • Maximising profits year-round.
  • Increasing occupancy rates during the off-season.
  • Improving cash flow.

Why do you need to set seasonal pricing for your hotel?

To truly grasp why seasonal pricing for hotels is essential, let’s use an example.

Suppose you are running your hotel business near a popular beach. During summer months, beaches all around the world become hotspots for tourists looking to soak up some sun and sand. This is the peak season. This is the season to make money. If you keep the standard basic rates as it is during the peak season, you miss the opportunity to earn profits. On the flip side, upping your room prices will increase your profits.

By contrast, the beach would appear desolate during wintertime. This is your off-season. It becomes increasingly difficult to attract travellers to your hotel. When business is slow, there’s no need to charge unreasonable prices. By decreasing the room rates, you can increase occupancy and earn a few extra bucks.

For these very reasons, you need a dynamic pricing strategy to help your business to stay afloat throughout the year.

Advantages of seasonal pricing for hotels

Earlier, we discussed some of the advantages of seasonal pricing, now, let’s look at a few of them in detail.

Increased revenue and profitability

Seasonal pricing gives you the opportunity to take advantage of higher customer demand during peak seasons. By increasing rates for this period, you are capitalizing on maximum market potential and setting yourself up for success when implemented correctly. Not only that, but seasonal pricing also helps ensure cash flow stability throughout quieter periods – so it’s a win-win. All in all, proper use of seasonal hotel pricing leads to increased profitability over time.

Enhances customer satisfaction through targeted discounts and promotions

During peak season, hoteliers don’t need to fret over occupancy rates – making it a great time for business. To drive more bookings during off-season months, targeted discounts and promotions should be offered. Not only does this bring higher satisfaction levels from customers but also boosts your bookings.

For example, offering a 5-10% discount on online bookings or offering special packages for longer stays can bring more customers during off-season. Not only does this help to make the most out of your slow season, but also creates a positive vibe in the hotel business that you will benefit from over time.

Dynamic pricing strategies you need to implement for your hotel

Here are a few strategies for dynamic pricing in hotel industry.

Take into consideration the regional and market trends when setting up the price

Establishing an appropriate rate for your rooms can be a difficult decision to make – one that could potentially determine the success of your business. To ensure you are making informed decisions, it is essential to thoroughly consider and plan out price models in correlation with current market trends particular to each season. With this information, you will have all the knowledge necessary to set optimal pricing rates for your hotel.

To effectively understand the local market, researching competitors is key. Investigate what prices they are offering in that season to get a good grasp of pricing structure and trends. Adjust your own costs accordingly – this ensures you neither overcharge or undervalue your products/services.

Make use of data-driven insights to optimise pricing

With the help of property management tools hoteliers are now able to capitalise on rate recommendations derived from vast amounts of data like competitor rates, historical rates and market dynamics. Nowadays it’s not uncommon for savvy hoteliers to use these powerful resources when faced with seasons in order to gain an edge against their competition.

For example, if you want to quickly adjust your rates across all your OTAs in Preno, you can do so all from within one dashboard. This technology helps arrange and keep up with your pricing strategy, so you don’t have to worry about it. Flexing your rates according to demand in mere seconds means you can swiftly capture market opportunities.

Adjust the prices according to the occupancy

For example, in the peak season, if your hotel occupancy is 10%, don’t increase the rates to a higher percentage immediately. Consider taking a gradual approach when increasing the rates. From 10% increase it to 20% and not 40%. First test the waters and when the occupancy increases, then again gradually increase the rates. You’ll eventually find the sweet spot of the highest occupancy rate you can achieve with a reasonable price.

In conclusion, adjust prices according to occupancy levels. During periods of low demand, it is best to reduce rates gradually based on the extent of availability.

How to get started with seasonal pricing

Below are a few ways to get started with a seasonal hotel pricing strategy.

Determine your hotel season

It is necessary to know when is the peak season or off-season for your hotel. You can know this by assessing the previous data. From the data, locate which months, days, or holiday seasons you are getting the most number of guests. Based on this, you can determine your peak season.

Consider using software solutions to automate seasonal pricing

Software tools like Preno help you it sync your seasonal pricing. With such software, you can increase your REVPAR by customising the rates according to the season.

It will also remove human input errors and helps in saving a lot of admin hours. You can also track the overall performance of how the rates are faring. It provides data on which rates have worked and which rates need fixing. Such information will help you devise a better seasonal pricing strategy, resulting in an increase in revenue.

Test different price points and accordingly adjust the price

Setting seasonal rates is not an easy job. Seasonal pricing is different for every hotelier. To find the right prices that work for you, sometimes you need to try a different set of price points. For that, you need to pay attention to the market pricing rates. Using these insights, try different rates and see which one works for you. In addition, you can also try testing the prices on different channels or platforms to get an idea of which one performs better. This way, you’ll have a clear picture on how to adjust your rates according to season.

Post monitoring and evaluation

Once you’ve implemented your seasonal pricing strategy, it’s important to monitor and evaluate its performance over time. You can do this by tracking key metrics such as guest’s reviews, occupancy rate, revenue per room etc. This will help you determine how well your pricing strategy is working and if any adjustments need to be made. By keeping an eye on such metrics, you can ensure that your hotel’s prices are always fair and competitive.

Overall, it is important to stay updated with the latest trends in seasonal pricing and be flexible enough to adjust the rates accordingly. By implementing seasonal pricing for hotels, you can ensure that your property is never overpriced or undervalued. Data-driven insights, software solutions and testing different price points are some of the ways you can use to establish a successful seasonal pricing strategy. With these strategies in place, you can make sure that your hotel business is going in the right direction.

Search Preno Blog

Explore our Topics

About the author

Preno's Marketing Content Manager, Kendra Jeffery, is educated in the Marketing and Communications fields and is passionate about helping hoteliers stay ahead of the curve.

Subscribe to our newsletter

Other Blogs you may also like


What Are the Benefits of Automation for Small Boutique Hotels?

During the pandemic, the entire tourism and hospitality industry had to come to a standstill. This saw many hotels and brands go out of business because of dwindling customers and mass lay-offs. But on the other hand, the industry saw a growing need for innovation. Most of the hotels that were able to escape the […]


Choosing the Best UK Booking System for Small Hotels

Choosing the best booking system for a small hotel can be a daunting task, especially when there are so many different products on the market. The booking system you choose will have a significant impact on your business operations and customer experience. This makes it all the more important to ensure that you select the […]


SEO for hotels: how to strengthen your hotels search engine optimisation

Did you know that your positioning on Google determines your consumer reach? Think back to the last time you searched something in Google – how far did you scroll? It’s almost certain that you didn’t make it past the first page of results. In fact, you might’ve only made it half way down the page. […]


What the New ETIAS Means for Hoteliers

The European Union has announced that the new visa-waiver requirements will be put into place in May, 2023. These requirements will mandate that all citizens of countries who currently enjoy visa-free travel to the EU must apply for an ETIAS (European Travel Information and Authorisation System) before traveling. The ETIAS application process is expected to […]


Why a distribution mix is important for a hotel

Every accommodation needs a diverse stream of revenue that encompasses direct and indirect bookings. While OTAs remain a channel for hotels to generate bookings, there has been a big push in the industry to emphasise the benefits of direct bookings. Direct and indirect channels help deliver a relevant and engaging customer experience, and helps your […]


Strategies for Reducing Dependency on OTAs in Your Hotel Business Model

There is a very common concern among hotel managers regarding their reliance on Online Travel Agencies (OTAs) for bookings. While OTAs may offer a quick and efficient way to attract guests, they come with high commission fees, which can significantly impact a hotel’s bottom line. In this article, we’ll explore some strategies for reducing dependency […]