High occupancy is usually taken as good news.
And in many cases it is.
But when a hotel sells its rooms too fast and reaches high occupancy levels far in advance, an important question can also arise:
Could we have sold those rooms at a higher price?
One of the most common mistakes in hotel management is automatically associating high occupancy with a correct pricing strategy.
However, the real goal should not be just to fill the hotel, but to achieve the best possible balance between occupancy and price.
A clear sign: bookings coming in too fast
Imagine a hotel with 40 rooms.
There are three weeks to go until a Saturday and it already has 36 rooms booked.
At first sight, the result looks excellent.
But if other similar hotels in the area are selling at considerably higher prices and still have availability, it may mean our rate has been too attractive.
In other words, we managed to sell quickly, but perhaps we left revenue on the table.
Compare the pace of bookings
One of the best ways to detect this problem is to analyse the pace of bookings.
We should ask ourselves:
How many rooms did we have booked for this same date seven days ago?And fifteen days ago?How did this date behave last year?Are we receiving bookings faster than usual?
If pick-up is especially strong, it may be a sign that the market is willing to accept higher rates.
Analyse your competition
Comparing with other similar hotels also provides valuable information.
It is not about copying their prices exactly, but about understanding how the market is behaving.
If our property is practically full while competitors keep higher rates, there may be room to review our strategy.
Of course, the comparison must be done properly.
It makes no sense to compare price alone.
We must also take into account location, category, reputation, services, cancellation conditions and room type.
Not all dates work the same
Another frequent mistake is using rates that are too uniform over long periods.
Demand changes constantly.
A Tuesday in November can behave completely differently from the following Saturday.
Events, conferences, concerts, public holidays or simply changes in demand can justify different rates even within the same week.
That is why rates should adapt to the real behaviour of each date.
Selling fast does not always mean selling well
A good Revenue Management strategy seeks to answer one question:
Are we getting the maximum possible value from our inventory?
When a room is sold, it disappears from our inventory for good.
If we later discover that the market was willing to pay more, we can no longer recover that opportunity.
That is why analysing the pace of bookings and anticipating demand is essential.