Raising a hotel's prices should not be a decision based solely on having many rooms occupied.
A good Revenue Management strategy tries to detect demand before reaching that point.
The goal is simple: identify when the market is willing to pay more and adjust rates in time.
Occupancy matters, but it is not everything
Imagine a hotel has 50 rooms and has already sold 40 for a Saturday two weeks away.
We might think it is time to raise the price.
But first we must analyse other factors.
For example:
- Are bookings coming in faster than usual?
- Are competitors also raising rates?
- Is there an important event in the area?
- How was this same date last year?
- How many rooms are really still available by room type?
High occupancy can justify an increase, but context is what determines the right decision.
Pick-up can give you the signal earlier
One of the most useful indicators is the pace of bookings.
If many bookings have come in over a few days for a specific date, it may mean demand is accelerating.
At that moment, keeping the same price can cause us to sell too fast.
And if we sell too fast, we may lose the chance to achieve a higher ADR.
Watch your competition
It is also important to analyse what is happening at other similar properties.
If our competitors are raising prices and starting to have less availability, it is a sign that demand exists.
However, we should not raise prices solely because another hotel has done so.
Our own situation remains fundamental.
Events and special dates
Trade fairs, conferences, concerts, sporting competitions, long weekends or celebrations can significantly increase demand.
The sooner we identify these events, the more room we will have to adjust rates progressively.
Waiting until the hotel is practically full may be too late.
Not all rooms have to rise equally
We can also manage rates by room type.
Perhaps standard double rooms are selling very fast while superior rooms still have availability.
In that case, the strategy can vary by product.
Revenue Management makes it possible to work far more precisely than applying a general increase across the whole inventory.
How much should it rise?
There is no universal amount.
An increase can be €5, €10, €20 or much more depending on the hotel, the market and demand.
What matters is making reasoned changes and observing how the market responds.
Pricing strategy is not a one-off decision.
It is a continuous process of analysis, adjustment and follow-up.