All of us love a bargain, right? A good deal is always a plus. Hotels and resorts are taking advantage of this by offering huge discounts to encourage people to book. Many hoteliers are stuck in a cycle of slashing their prices constantly, offering discounts through direct channels, OTA promotions and special rate packages. It can hurt your brand by lowering rate integrity and compressing margins.
You may not even need aggressive discounts anymore to boost performance. If you are a luxury brand for example, lowering prices may not bring in more bookings. What else can be done?
Focus on value-added services
Instead of simply lowering prices, focus on providing guests with more value for their money. In luxury and boutique hotels in particular, guests are often more interested to get something extra rather than just a cheaper price because of the perception of greater worth. Imagine that instead of 15% discount, you get a free spa service, someone picks you up at the airport or arranges a tour. It feels more special. The cherry on the top is that you can maintain your average daily rates (ADR), while improving guest satisfaction, loyalty, and experience.
Prioritize direct bookings
A second thing you can try is to get people book directly with your company. You could offer tailored incentives, create loyalty programs and member-only rates instead of discounting everywhere. Tools like personalized email marketing, dynamic content on booking engines, and tailored digital advertising can shift focus from pure rate competitiveness to relationship-building and brand engagement. By leveraging customer data, you can also offer deals that are tailored to what the guest likes. This will result in more bookings and less need for general discounts.
Position your brand to be successful
Let’s not forget to make sure your hotel is awesome. You might not have to cut back on anything if you already have a strong story, a brand that is unique, and something else that sets you apart from your competition. This could mean investing in social media engagement, influencer partnerships and high-quality content for luxury and niche properties.
The combination of these factors will make your property more attractive, which in turn will encourage guests to be less price-sensitive and more focused on the experience.
Profit from revenue technology
Revenue management systems have evolved in order to offer smarter segmentation, demand forecasting and a finer level of granularity. AI-driven tools can be used to identify who would most benefit from a particular offer instead of offering everyone the same discount. You can offer special discounts to repeat business travelers or those looking for local getaways during shoulder season. You can fill your rooms using this approach without having to lower prices.
Think TRevPAR before ADR
Gains in performance can be realized by shifting the focus to optimize total revenue per available rooms (TRevPAR), instead of just occupancy or average daily rate. You can create a stable revenue stream by upselling and cross-selling other services. Also, you can promote on-site spending in restaurants, spas and so forth. These extras can be a major part of your hotel’s profitability, and they allow you to tailor the experience for guests more than just focusing on price.
Strategic partnerships
Final thought: Consider creating co-branded packages with local businesses, well-known companies and experience providers. These packages will have a perceived value of high quality, but you won’t need to reduce your rates. These partnerships can also help to market your business.
Mass promotions must be abandoned by the industry
While rate parity was once the cornerstone strategy for controlling over-promotion, the hotel industry has grown beyond this approach. With access to advanced technologies, data-driven marketing, and a better understanding of guest behavior, hotels—especially those in the luxury or niche segments—can focus on creating value, elevating brand desirability, and maximizing total revenue. By leaning into personalization, unique experiences, and relationship-building, you can break free from the endless cycle of discounts and achieve sustainable performance growth without sacrificing your brand positioning.
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This post was originally published on the Duetto Blog here The reproduction of their work is done with their permission.
