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The importance of pricing strategies in the hospitality industry
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
Kuda Villingili Resort Maldives has been nominated in the Resorts category for the Condé Nast Traveller Readers’ Choice Awards 2026 (UK) and the Condé Nast Traveler Readers’ Choice Awards 2026 (US), marking a further development in the resort’s international recognition.
The Readers’ Choice Awards are based on traveller feedback and are considered a key benchmark within the global travel industry. The dual nomination reflects the resort’s presence across international markets and its engagement with guests from different regions.
The nomination follows a series of recognitions for the resort. In 2025, Kuda Villingili was ranked among the Top 5 Overseas Leisure Resorts Worldwide in the Condé Nast Traveller Middle East Readers’ Choice Awards, placing fifth globally. It was also listed among the Top Resorts in the Indian Ocean in the Condé Nast Traveler Readers’ Choice Awards 2025 (US). The resort was similarly recognised in the 2024 edition of the awards.
Located in North Malé Atoll, approximately 30 minutes by speedboat from Velana International Airport, Kuda Villingili Resort Maldives offers 75 villas and residences, each with private pools and views of the surrounding ocean.
The resort features eight restaurants and three bars, including Japanese-Peruvian dining at Mar-Umi and Teppanyaki by Mar-Umi. Other dining options include Asian cuisine at East and grill offerings at Fire. Additional facilities include a cigar lounge, a large swimming pool, a spa with overwater treatment villas, and a range of wellness and recreational activities such as yoga, sound therapy and surfing.
Amjad Thaufeeg, Commercial Director at Kuda Villingili Resort Maldives, stated that the nominations reflect feedback from guests across international markets and noted the importance of maintaining consistent service standards.
Voting for the Readers’ Choice Awards 2026 is open until 30 June 2026, with results scheduled to be announced in November 2026.
Baros Maldives is set to host a curated Earth Day experience titled Earth Day in Bloom on 22 April 2026, offering guests an evening programme centred on sustainability, nature and locally sourced ingredients.
The event will begin at 6:30pm at the resort’s Chef’s Garden, where guests will be welcomed with a Garden Spritz before taking part in a guided tour of the garden. The tour will introduce participants to local herbs and island-grown produce cultivated on the property.
As part of the programme, guests will be invited to plant their own herb, contributing to the garden while engaging in an activity aligned with environmental awareness. The experience will continue with a garden dinner starting at 7pm, featuring a menu designed around fresh, seasonal ingredients sourced from the island.
An optional pairing of organic wines will also be available, providing an additional element to the dining experience.
The event is priced at USD 175 per person, excluding applicable service charge and taxes. Reservations can be made through the resort’s butler service.
The initiative reflects Baros Maldives’ focus on sustainability-led guest experiences, integrating environmental awareness with culinary offerings and on-island activities.
Cinnamon Dhonveli Maldives has been recognised as a Quality Winner at the TUI Global Hotel Awards 2026, an accolade based on guest feedback from travellers worldwide. The recognition reflects the resort’s delivery of guest experiences shaped by service standards, facilities and alignment with evolving traveller preferences.
Located in North Malé Atoll, Cinnamon Dhonveli Maldives offers a range of accommodation options, with more than 140 units including overwater suites, beach bungalows and duplex garden bungalows. The resort is designed to accommodate couples, families and groups.
The resort features seven dining venues offering a mix of international and local cuisine. Tex Mex serves Mexican and Spanish-inspired dishes, while Dalchini offers an Indian à la carte menu available for lunch and dinner. Raalhu Bar provides a setting for evening refreshments, with views of the sunset.
Cinnamon Dhonveli Maldives is also known for Pasta Point, a surf break recognised for its left-hand waves. The resort attracts surfers from international markets who travel to access the location. Surf operations at Pasta Point are managed by Atoll Adventures, with bookings handled through Atoll Travel to ensure a structured approach to surf access.
The TUI Global Hotel Awards are determined by guest reviews, making the recognition an indicator of guest satisfaction. The resort’s inclusion as a Quality Winner reflects its performance in meeting guest expectations within the Maldives tourism sector.
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