Slashing your room rates to get increased occupancy is not the answer to generating higher sales margins. Whereas it might increase occupancy rates slightly it will have a negative impact on your customer’s perception of quality, a massive impact on your margins and, once cut, it is extremity difficult to put prices back up again.
However, the Buy One, Get One Free or Two for the Price of One promotions still offer additional value, but leave you the flexibility to offer these only on certain items, or at certain times, or to a specific target customer. A variation on this is half price offers, but this still devalues your customer’s perception of quality, and the potential for you to only sell half as many.
A variation on price promotions is offering free upgrades on availability. People often remark that once you have flown first class you’ll never want to go back to economy! This follows the same principle – giving people a taste for your best offers, services and products can encourage them to upgrade at their own expense next time around. It also leaves them with a better experience than they may have expected which promotes a talking point and a great way to prompt testimonials and get referrals.
When conducting price promotions remember the rules of costing out beforehand, and think of high value to customer, low cost to you. You might therefore want to offer buy one, get one free just on your main courses, but all starters, side orders, deserts and drinks will still be at full normal price. The main meal is normally the price that customers will look at first so from their perspective this offers great value for money. For accommodation you might offer one night, get a second night free, for nights which otherwise have very low occupancy. Result – a booking you might not have otherwise had, with minimal additional cost to you for the second night, so minimal impact on your margin.
I have just produced a new report “57 Ways to Boost Sales and Get More Repeat Bookings for Your Hotel“. To get your copy click the link here.Share This: