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How to Boost Villa Marina Lodge Revenue Practising Dynamic Pricing ?
This document was elaborated by Hopinoer Florie Thielin for the Villa Marina Lodge, Panama, in a serie of works and studies allowing tourism professional to make their activity more sustainable.
Boost Revenue Practicing Dynamic Pricing for your Hotel
Spread the awareness, get together and act for a responsible tourism.
Hopineo for Villa Marina Lodge – November 2014
Dynamic Pricing Strategy, called as well “Yielding”, is the main lever of Revenue Management.
Nowadays all hotel chains are using these principles in order to:
→ Increase their incomes by pushing up:
Occupancy in low season.
ADR (Average Daily Rate) in high season.
The main KPI (Key Performance Indicator) to watch out is the Hotel RevPar (Revenue per
Become Hopinoer 3
1. Why to practice dynamic
2. How are you going
to do it?
3. A few examples
for Villa Marina Lodge
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•Strong hotel competition in your destination.
•Selling through rates comparison booking engine (OTA).
•Be competitive to gain market share if you need to fill up.
•What you don’t sell tonight, you can’t sell it tomorrow, it’s
revenue lost forever.
•Better sell a room cheaper than nothing at all.
•On busy dates, you’d love to have more rooms to sell?
•Sell at higher rates: fill in slower but better (rates & LOS)
•Whatever your hotel specificities, you’ll always gain to
implement the most basic revenue management
principles. Adapt your strategy smartly.
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• Competitors positioning: rates, guests reviews, location, OTAs ?
• Clients market segmentation: who, when, how much ?
• Market seasonality, events, bank holidays, school holidays ?
• Historical : daily calendar of past occupancy, rates, groups.
• Booking patterns for each market segment: length of stay (LOS), lead time, occupancy per
day of the week, cancellation ratio, total revenue per client, nationalities, sales by channel
(direct, indirect, TO, walk-in).
• Non yieldable market segments: bookings that you have to accept because you signed a
contract (tour operators allotments, corporate contracts, last room availability (LRA)).
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The “Pick-up” is the total of new reservations that you received between two dates:
→ Daily pick-up: between yesterday and today.
→ Weekly pick-up: between today and last Monday.
The pick-up report calendar helps you to take smart decisions whether to change rates or not,
add a length of stay restriction or not in order to enhance your RevPar (Occupancy and Average
Build up an automatic dashboard on excel which allows you to get a quick overview of your pick-
up by an easy copy-paste of your future reservations (=“on-the-book”) from the data exported
out of your PMS.
Add also the pertinent external and internal data that you collected previously (cf. previous slide)
in order to get everything together in one unique calendar document.
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The Booking Pace is the speed at which you are taking new reservation for a coming given date:
→ “Hot” dates: quick booking pace as you fill them in quickly,
→ “Cold” dates: slow booking pace as it is difficult to fill them in.
By starting watching out your pick-up, you’re going to get more and more “feeling” about how
guests tend to book for your destination.
Ask yourself pertinent questions such as:
→ How far in advance do people start to book?
→ When does the booking pace usually increase?
→ Are we ahead or behind on last years or last months trend?
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Different “kind of” guests are willing to pay different “kind of” rates depending of their specific
needs and expectations. It can be interesting to make the most of this opportunity by building
different “products” to target these different types of clients.
Build up a clear Pricing Grid with:
- Room categories: superior room vs. deluxe with sea view and private terrace.
- Package Element with an extra services or amenities included on the rate: breakfast, bottle of
wine in room, flowers welcome set up… be creative !
- Guaranty, cancellation and modification policy which is more or less flexible.
- Minimum length of stay restriction and booking lead time at which the rate is available.
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Start with rather low rates in order:
- to be competitive when guests compare your rate with the ones of other hotels in your
destination offering the same level of service.
- to be sure that you’ll cover at least your fix operational expenses in very low periods.
- to build up a solid occupancy base from which you can then start to yield: increase
rates when you already reach a certain level of occupancy.
→ A room that you don’t sell tonight, you can’t sell it tomorrow.
→ It is revenue lost forever.
→ Better sell it cheap than to not sell it all!
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Static Pricing Dynamic Pricing
+ Promotions from 129$ + 10%
Low & High Season
Agree on a:
- Minimum : 95$ +10%
- Maximum (= Rack) : 250$ +10%
Adapt your rates on a daily basis.
Publish only your rack rate.
Invite guests to check the best rate
available depending of their requested
dates using the booking button.
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3 2 140$ 74$
4 2 180$ 90$
*Rates for Double Room on Sun. 8th Feb 2015.
Offer two different room categories:
Superior : double and twin rooms (rooms 1,2, 3, 4)
+30$ for Deluxe : with private terace and sea view (rooms 5, 6, 7, 8, 9)
BARBB Breakfast No No Credit Card
J-15 free of charge
LOS -30% Breakfast No 6 Credit Card No
GROUP -10% Breakfast 15 days 2 Credit Card No
EARLY -30% Breakfast 30 days 2
Once you’ve got a solid base of occupancy, you can start to increase rates:
to push-up your ADR (Average Daily Rate), but be careful and increase rates in baby steps,
and keep watching out your booking pace and competitors rates.
New special event (example wedding 10 january)
If the hotel is almost full on one specific date: in case of pic of occupancy.
For special event dates: better fill in slowly but at higher rates! Make your booking with special
cancelation policy and set up nice LOS restriction.
Put LOS 2 nights on each Saturday, and then one or two weeks before take it off if you did not
You might decrease rates on last minute (day of arrival, or a few days before) until you get a
If you set up initial rates too high and that you’re not taking any new booking.
If the hotel is almost full on one specific date: in case of pic of occupancy.
If you still have rooms available and walk-in guests are coming:
Listen to their need and budget carefully: how many nights do they plan to stay? How
much would they be willing to pay? Which kind of hotels are they looking for?
Try your best to negotiate well and make them staying;
Remember, it’s always better to sell a room cheap than no revenue at all !
Example with 90$ budget ?
Until 80$ without breakfast ?
Is it an « interesting » request ?
Don’t necesarly lower the rates if you know that you could fill in anyway on those dates.
If only one night: is it really an interesting business? It can be difficult to fill the nights of before
and after… and then you loose revenue.
Be very careful with guarantee and cancelation policy !
Now you’ve implemented a dynamic pricing strategy, start thinking as well about upselling
At each new booking received, send an email back with offer for one more night.
Offer to guests on arrival to get an upgrade for only 20$ more (if avail).
Offer clearly set of activities and restaurant food & beverage.
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This document was elaborated for the Villa Marina Lodge, Panama,
in a serie of works and studies allowing tourism professional to make their activity more sustainable.
What is missing? Which improvments could be done?
Please, feel to free to share with us your feedback to continue
building together a better future for Hopineo, its partners, and more globally
for a more responsible tourism.
« The recognition of tourism as an economic powerhouse and contributor to all three pillars of sustainable
development – economic, environmental and social – underlined the enduring relevance of UNWTO’s mission to
promote responsible, sustainable and universally accessible tourism. »
World Tourism Organization, 2013