9 years
Hey guys,
I think this all depends on what kind of brand you're trying to build, not about whether there is a wrong way or right way. Both have justifications, and I don't think one is more moral than the other.
If you're a business that works on the idea of referrals or repeat business, I think it's a good tactic to try and offer a standard rate. Or if you are operating in multiple cities and you want to get a name for your price policy (as well as general levels of service, etc) then I'd say this is quite a good tactic.
Still, I have to say that I do believe that generally it is better to calibrate your price according to demand, and I think it's fair. If you, for example, charge a non-refundable rate, you're effectively penalising those that book early by keeping the prices the same. Also, a good tactic is generally to think of what the relative supply is and to estimate the occupancy of your competitors and the city in general (you can find this easiest probably by looking at the occupancy of the city for a given date from booking.com). I think for real revenue management, one shouldn't just be based on demand.
I really disagree with the above as regards giving a higher price to those that walk in to the property, however, than the prices which are online. As a customer, I'd feel a bit let down if I found that the hostel is offering lower rates than what I find online (and I think we should assume that everyone has a smartphone these days on which they can check it).
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