Increasing rates is more profitable than increasing occupancy. But, it requires value

Increasing rates is more profitable than increasing occupancy.

But, it requires delivering more value to your guests.

Hotel owners LOWER prices because they want to compete with others and are scared there would not be enough business for everyone.

This is a DEAD-END street. With such an approach, you will NEVER have a striving business, bright future, nor be able to overdeliver to your actual guests. Not to mention complications in running a team and organizing processes in such a business.

Their main economy driver is operating at higher capacity.

This is WRONG. E.g. 90% occupancy will bring LESS absolute profit than 50% occupancy, due to higher costs involved.

In contrast to this, many owners opt for INCREASING prices hoping to attract higher paying guests.

And this is simply NOT how it works.

Yes, these people will pay higher prices BUT ONLY when there is clear and appropriate value for them.

They need to see and feel the value before they come. They will NOT trust any advertisement but rather conclude on small details presented.

They live that lifestyle; they KNOW what a valid offer is.

You will just end up with people who do not live this constantly and are VERY DIFFICULT to do business with, especially to serve them.

The value also needs to be appropriate, meaning it doesn’t matter what YOU find valuable but what THEY NEED AND ARE READY TO PAY FOR.

HINT: Experience and convenience is a new luxury.

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