Perceived fairness is of key importance for hoteliers – a recent Cornell Hospitality Report, ‘How Hotel Guests Perceive the Fairness of Differential Room Pricing’, shows that when customers perceive hotel revenue management practices to be fair, they are more likely to be satisfied with the hotel and are more likely to return to that hotel in the future.
To satisfy your customers and successfully optimise your pricing strategy, I recommend focusing on communication. The Cornell Hospitality Report found that the key factor in perceived fairness was the customer’s familiarity with a hotel’s pricing practices. Communicate your pricing logic clearly to your customers.
Also communicate choice. Customers should understand that, in most instances, they have a choice between a restrictive rate and a flexible rate. While a restrictive rate comes associated with clear rate fences and a commitment, a flexible rate benefits from no restrictions, but risks a higher market price. Again, communicating this choice and distinction clearly to your customers, will highlight the reasoning and logic behind differential pricing.
The Cornell Hospitality Report also outlines a number of strategies by which you can increase your guests’ familiarity with their differential pricing practices.
The report can be downloaded, free of charge.
