Every industry
is trying to attract customers with cheesy schemes and bonanza, so let it be
Big Bazaar which has come with purana do naya lo (Dump old get new) offer or
Shoppers Stop has come back with 51% discount offer. Though every offer here is
both attractive for some and useless for some.
The catch retail
is, they need customers to walk-in rest they would entice with superlative displays
and bowing sales executives.
It’s not that
Hoteliers don’t try with such cheesy schemes, every property today thrives to
give best of Personal relation with crowd out and try get them in. Success is
though less, as one of my Hotelier friend claims that his 50% of offers are not
attractive and fail to achieve numbers. As hoteliers come up with schemes which
are secondary in need, like food feast, booze free, Wi-Fi free and many things
which don’t connect.
What if
Hoteliers abolish schemes and go other way by an approach of Good-Better-Best
pricing and attract customers to stay in with less of frills.
Can Hoteliers
adapt Good, Better and Best pricing using Data science or Analytical tools,
instead of Hallucinating demand and giving away deeper discount to hurt
business.
Some Hotel
properties are more depended on repeat business or travel agent or on sales
team or on marriage and other seasonal events. Most of the times, in the zest
to achieve the business and to get ARR, hotelier find themselves caught in a
cycle of steadily decreasing price and in never-ending battle to match lower
price competition.
Or let’s say if
we go adamant way and declare optimum price, elasticity is such that it does
not make sense to raise price because the extra per unit profit overshadows by
the lost sales. If we start giving away discounts again on optimum price your
increased sales doesn’t compensate for lower profit margins. If you apply this
approach for your price planning, then I am sure there will considerable amount
of ambiguity among staff interacting with guest. Let’s get away from one
perfect price.
Let’s battle
this out with understanding more on external factors impacting our business and
how to make effective Sales team which will work hard on historical data and
get business. There should be better understanding of business decision and
pattern to give discounted price. More structured discount pattern will help
sales staff, front office executives and other front line manager to close
business in line with standard pricing.
When a
restaurant which tends to focus on mid
night business, but still aspires to get business throughout the day, can come
with concept of discounted price, early bird and other decent concept, then why
can’t a property have price list which would be multi price and ease business
down line.
Your historical
data can help you to understand and derive price concept called Good, Better
and Best. So next time anyone walking in your property, let them know about
your option, Good – lower price, Better – Higher price and Best – Highest price.
About The Author
Mahesh is the Managing Director of Compel Consultancy Pvt Ltd, which specializes in software for hospitality vertical. He can be contacted on
mahesh@compelconsultancy.com