How to quote a hotel group rate that converts to a sign the agreement?
May 10, 2020, |Hotel Marketing

A successful pricing strategy will boost your hotel revenue. You will lose potential customers to your competitors if you charge too much. If you charge too little, you are going to end up losing money.

There are a lot of hotels that do not follow the right pricing strategy to maximize their group revenue potential. If you're a new revenue manager at a property or you just took ownership of a hotel, here are market research strategies to help determine your group rates.

First, do two kinds of mystery shopper requests. Make a digital and phone request for proposal (RFP) to all the properties in your market. Find out what discounts they offer, how much their best available rate and published rate are, what kind of agreements they have, and what attrition and cancellation policy they implement. It will give you a better idea of how competitive you need to be and what your pricing strategy will be to ensure a high conversion rate from your group leads.

Next, consider that properties in the United States offer 10-15% off the best available rate to walk-in clients who have AAA, ARP, or any membership discount. If you want to make your rates competitive, a good rule of thumb is for your group rate to be at least 15% off your best available rate.

Depending on how big the group event or how bad you want the business, you can offer as much as 20-30% off your best available rate to make sure you get that signed agreement back. Make sure, however, that you consider commissions and rebates to come up with a financially sound offer.

Remember, the income you miss out on from an unsold room is forever lost. Adjust your rates today and increase your chances of being fully booked.

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