Why your hotel should never be sold out?
January 19, 2020|Hotel Marketing
While it might seem counterintuitive, it is a fact that a hotel completely sold out days or weeks in advance is a costly mistake.
Many property managers celebrate when their hotel sells out at a future date. It’s definitely one less thing to worry about. It’s also a surefire way of losing potential guests who are willing to pay more for the rooms that have already been sold.
Here’s why you should never sell out your hotel too soon.
If there is a big event, say a convention, happening in your town in a few weeks’ time, and you have already contracted all your rooms to a corporate group in advance, you will have already missed out on rates twice, thrice, or four times that of your normal off-peak rates. Meanwhile, your competitors who held out on making a sale have more room to maneuver their prices.
Let’s say that the average rate for a property within your market segment is at $200 a night but you completely sold out your inventory at $150 a night after commission. A few weeks down the road, the entire market would be sold out except for about five properties that are selling at $500 a night. At this point, you are already out of the game and you have lost so much revenue potential.
While you should still pursue corporate group accounts, make sure that you are not giving away your entire inventory. Always maintain some degree of availability. In the end, you want to have enough room so you can make price adjustments based on the increasing market demand.
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