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The importance of pricing strategies in the hospitality industry

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The hospitality industry is a highly competitive industry where pricing strategies play a crucial role in determining the success of a business. The price of a product is one of the major factors influencing its sales. However, the pricing strategy in the hospitality industry is not as simple as just setting a price. Many factors need to be considered, such as unique selling proposition (USP), cost per available room (CPAR), competitor pricing, and market segmentation.

In the hospitality industry, hotel rooms are considered perishable items, which means that if the product is not sold before the night audit, it results in lost revenue. An empty room in a hotel is lost revenue as maintaining an empty room incurs a running cost. One of the prime principles of revenue management is selling at the right price, but how do you know if you are selling at the right price?

The first factor to consider when setting a price is the unique selling proposition (USP). A strong unique selling proposition must correlate with the right price. USP does not necessarily have to be an inbuilt product in the room; it can be service-related or facilities-related. Value-added benefits will also add value to your product and demand a higher price.

The cost per available room (CPAR) is another important factor to consider when creating price points for a hotel room. CPAR is one of the metrics used in the hospitality industry to calculate the total cost of an unoccupied room at a given time. Understanding the CPAR is important to avoid any loss, and factoring in the CPAR will help generate profit.

The cost-plus pricing method is used during extremely low demand. During the pandemic, many hospitality establishments used this method to sustain their business. The hotel rooms were sold at a lower price, keeping the cost of operating plus a profit markup. Group pricing, especially tour series, can be locked profitably by calculating the rate based on the cost-plus pricing method during low-demand periods.

Refurbishment and renovation of hotel rooms are essential to maintain brand quality and offer quality products. A well-maintained room product often fetches a good price, as the quality of the product still has value. When a hotel room is refurbished, it can be positioned back into the market at a slightly higher price point.

Competitor pricing is another factor that should be considered when setting prices. When your room’s price points are in line with or below the price of your competitors, you may be trying to capture a larger fair share of the market. The method of competitive pricing involves analyzing prices and setting prices based on your competitor set. This technique is very widely used in the hospitality industry.

Pricing strategies in the hospitality industry are a critical component of revenue management. Pricing strategies must be carefully considered and analyzed based on various factors, such as unique selling proposition, cost per available room, competitor pricing, and market segmentation. A well-planned pricing strategy can increase revenue and maintain the hotel’s competitive edge.

Editors Note: The article above is based on a publication by OARS Consultancy, a hospitality consultancy firm located in Dubai. OARS, which stands for OCCUPANCY.ADR.REVPAR.SOLUTION, is dedicated to the hospitality sector with a strong emphasis on revenue management consultation and hotel and resort-related projects. The company comprises a team of professionals from around the world who bring their expertise together with the common goal of providing solutions to optimize revenue growth for hotels and resorts. For more information about OARS visit https://oarsolution.com/

Link to the original publication: Pricing Strateigies

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Holiday Inn Resort Kandooma Maldives offers Dive Free programme

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Holiday Inn Resort Kandooma Maldives is offering guests access to a range of dive sites in South Malé Atoll through its Dive Free programme, aimed at divers seeking structured and accessible diving experiences during their stay.

Located approximately 45 minutes by speedboat from Velana International Airport, the resort provides proximity to multiple dive sites within a 10 to 30-minute boat radius. The surrounding waters are known for varied reef structures, current-driven channels and regular marine life encounters, allowing for multiple dives per day.

The Dive Free programme is available to guests staying three nights or more, offering up to two complimentary scuba dives per day for up to two certified divers per villa.

According to Dive Centre Manager Ibrahim Shaan, the location enables access to a range of dive environments within a short distance, including reef and channel dives. He noted that sites such as Kandooma Thila can be reached within minutes, while additional sites offering different conditions are accessible within half an hour.

Director of Marketing and Sustainability Sharon Garrett stated that the programme is designed to integrate diving into the overall guest experience, reducing both time and cost considerations for certified divers.

Water conditions in the area remain suitable for diving throughout the year, with visibility often exceeding 20 metres. The dive sites accessible from the resort include:

  • Kandooma Thila, a coral-covered pinnacle known for sightings of reef sharks and eagle rays
  • Guraidhoo Corner, a channel dive site with strong currents attracting schools of fish and larger species
  • Cocoa Corner, featuring reef walls and drop-offs with occasional pelagic encounters
  • Kuda Giri Wreck, a sheltered site with a wreck and reef supporting reef fish and macro life
  • Kandooma Caves, characterised by overhangs and reef formations with diverse marine species

Additional nearby sites include Manta Point, Lhosfushi, Medhu Faru and Waggiri, offering a mix of reef and channel diving, with seasonal manta ray sightings.

The resort operates a PADI five-star dive centre with guided excursions and access to multiple sites within short travel distances. The Dive Free programme is positioned as an option for divers seeking to maximise time in the water without the need for domestic transfers, providing direct access to dive locations from a single island base.

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Grand Park Kodhipparu Maldives unveils Eid al-Adha experience

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Grand Park Kodhipparu Maldives has introduced a curated Eid al-Adha offering aimed at travellers seeking a structured yet flexible way to mark the occasion in a resort setting.

Branded “Island Celebrations: Eid – Connect in Paradise”, the experience is positioned for guests from the Middle East, North Africa and Asia, with a focus on shared experiences, personal time and engagement with the surrounding environment.

Located approximately 20 minutes by speedboat from Velana International Airport, the resort is accessible for short-stay and family travel during peak holiday periods. The property features 120 beach and overwater villas, alongside an overwater spa, house reef and multiple dining outlets.

The Eid experience will begin with an in-villa welcome offering, including Arabic sweets, dates and fruit. The programme is structured around a series of optional activities rather than a fixed schedule. These include lagoon-based experiences, daily yoga sessions at sunrise and sunset, spa treatments, sunset cruises and dining options designed for private or shared settings.

The resort has indicated that the programme is intended to allow guests to engage with activities at their own pace, rather than follow a defined itinerary.

In line with the preferences of Muslim travellers, the resort has incorporated halal-friendly dining options, flexible meal arrangements and an expanded range of non-alcoholic beverages. Villa layouts are also designed to support privacy.
Grand Park Kodhipparu Maldives has reported guest ratings of 9.2 out of 10 on halal travel platforms, reflecting demand within this segment.

The introduction of the Eid programme aligns with broader trends in the Maldives tourism sector, where travel experiences are increasingly structured around personalisation, cultural considerations and smaller-scale experiences.

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OBLU NATURE Helengeli by SENTIDO unveils chef-led 9-Hands Dinner experience

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OBLU NATURE Helengeli by SENTIDO has announced a 9-Hands Dinner event scheduled to take place from 25 to 27 May, offering a curated dining experience as part of its guest programme.

The event will feature a multi-course menu developed by three chefs representing Egypt, Madeira and the Maldives. Each chef will present dishes reflecting their respective culinary backgrounds, combining different techniques and flavour profiles within a single dining concept.

The dinner is positioned as an interactive culinary experience, bringing together elements of storytelling and presentation alongside the menu. According to the resort, the concept is designed to highlight both innovation and traditional influences in cuisine.

The experience will be included within the resort’s plan for in-house guests, forming part of the overall stay offering.

Commenting on the event, General Manager Alain Trefois stated that the initiative reflects the resort’s focus on expanding guest experiences beyond standard dining formats. He noted that the event provides an opportunity for guests to engage with culinary presentation in a structured setting.

Anupam Banerjee, Vice President Food & Beverage at Atmosphere Core, said the collaboration brings together different culinary influences, combining regional ingredients and techniques into a single dining programme.

Located in North Malé Atoll, OBLU NATURE Helengeli by SENTIDO is known for its house reef and marine environment, offering a range of activities alongside its accommodation and dining options.

The resort has indicated that availability for the 9-Hands Dinner event will be limited, with advance booking recommended for guests wishing to attend.

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