how to built your hotel marketing plan, step ny step. part II
4. Pricing Strategy
This part of your hotel’s marketing plan should be a collaborative process with your revenue management team or revenue manager. After all, setting hotel rates is a fine art.
Hotel rate positioning strategies fall into four main (broad) categories: economy, penetration, skim, and premium pricing.
The cheap pricing strategy for hotels is to fill as many rooms as possible. That means selling rooms at the lowest rates, with the least amount of promotion necessary.
Penetration pricing strategy for a hotel means selling high quality rooms and services at lower prices than its competitors. This is how many new hotels increase their market share.
The skim pricing strategy for hotels is the opposite of penetration. Hotels offer their product at a higher price level than their competitors, usually to signal exclusivity or quality to customers.
Premium pricing strategy for a hotel means charging high prices for a room and/or service product that is already perceived as high value or excellent quality. This can include “abstract” benefits like the sense of status that comes from staying at a Four Seasons hotel, for example.
Personally, I find it useful to visualize your positioning compared to competitors.
Every time I’ve worked on a luxury hotel marketing plan, the team meets to map out our positioning on a price matrix grid and determine where we want to move in the coming year.
5. SWOT Analysis
SWOT analysis is a tried and true tool for business planning and decision making.
You may already be familiar with it. I don’t know about you, but I’ve definitely done my fair share of SWOTs over the years. 😅
A quick refresher though: SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
Here is what you might want to consider when doing a SWOT analysis for your hotel:
Strengths — What are your Unique Selling Points (USPs)? Strengths can be anything from a great location, wonderful employees and service, to strong brand recognition.
Weaknesses: Maybe its placement isn’t that great after all. Be honest about what might be holding your hotel back from growth, whether it’s bad online reviews, lack of F&B or fitness facilities, or budget. Perhaps your hotel’s website is due for an update?
Opportunities — Two areas to look for opportunities are market trends and guest feedback. Do some research for ideas to attract new markets or launch revenue-generating products.
Threats — What external factors could negatively affect your hotel? This could mean changes in OTAs or a sudden boom in nearby Airbnb listings. Other potential threats include new hotel openings, negative press coverage, even hiring or staffing shortages. Anticipating these threats gives you more time to act!
No two hotels are exactly alike.
Your downtown boutique hotel marketing plan will not be the same as someone else’s island resort marketing strategy. Heck, you could have a collection of multiple boutique hotels in the same destination, and each business plan is still totally different.
When you’re creating hotel marketing plans, doing a thorough SWOT analysis helps reinforce each property’s unique competitive advantages, areas for improvement, and growth opportunities.
6. Historical data
To get where you’re going, you need to know where you’ve been.
That’s why it’s important to get some historical data from your hotel, not only to track changes, but also to make projections and business goals for the coming year.
This is what needs to be checked. Include at least 2–3 years (ideally more!) of this data in your marketing plan presentation:
Rooms Available/Sold
Market share
Average rate
RevPAR
Occupation
You may want to sync up with your favorite revenue manager again to get these numbers!
