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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

Excursions

Holiday Inn Resort Kandooma Maldives reports rare whale shark encounter

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Divers from Holiday Inn Resort Kandooma Maldives recorded a whale shark sighting last month during a dive at Kandooma Thila in South Malé Atoll.

The encounter took place on 13 April during a guided dive led by Dive Centre Manager Ibrahim Shaan. The whale shark, estimated to be approximately six metres in length, is believed to be a juvenile aged between eight and 15 years. The animal remained in the vicinity of the divers for more than 30 minutes before leaving the area.

Shaan said the whale shark entered the dive site calmly, circled alongside the group and remained present for an extended period. He described the encounter as one of the most notable experiences observed at the site.

Whale shark sightings are considered uncommon in South Malé Atoll, where the species is not typically resident. They are more frequently associated with the South Ari Atoll Marine Protected Area, one of the primary aggregation areas for whale sharks in the country.

The Maldives is regarded as a key destination for whale shark encounters due to environmental conditions including warm waters, nutrient-rich currents and seasonal plankton blooms. Whale sharks are filter feeders and migrate across large distances, often following food sources.

The sighting at Kandooma Thila is understood to be linked to broader migratory movement through the atoll system, with the animal potentially following plankton concentrations or feeding opportunities created by ocean currents.

Kandooma Thila is known for its coral-covered structure, current-driven conditions and marine biodiversity, factors which may attract larger pelagic species on a temporary basis.

Following the sighting, the resort has submitted photographs and video footage to the Maldives Whale Shark Research Programme (MWSRP) for potential identification through its national database. Whale sharks can be identified through unique spot patterns located behind the gills and along their flanks.

The MWSRP’s Big Fish Network database has recorded more than 800 individual whale sharks in the Maldives, contributing to long-term research on migration patterns, population dynamics and species health.

Sharon Garrett, Director of Marketing and Sustainability at the resort, said the data collected would support ongoing research and conservation efforts. She noted that such information contributes to understanding seasonal movement patterns, assessing environmental conditions and informing marine protection measures.

The resort has also reiterated the importance of responsible interaction with marine wildlife. Recommended practices include maintaining distance, avoiding physical contact, refraining from flash photography and ensuring appropriate buoyancy control.

Boat strike incidents remain a recognised threat to whale sharks in Maldivian waters, highlighting the need for careful vessel operation in areas where marine life is present.

Holiday Inn Resort Kandooma Maldives is located approximately 45 minutes by speedboat from Velana International Airport and provides access to multiple dive sites in South Malé Atoll. The resort also operates a Dive Free programme, offering up to two complimentary dives per day for certified divers staying a minimum of three nights.

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Celebration

Sirru Fen Fushi to host Eid al-Adha celebration from 27–29 May

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Sirru Fen Fushi – Private Lagoon Resort has announced its “Eid in Harmony” programme for Eid al-Adha, scheduled from 27 to 29 May 2026, offering guests a series of curated experiences centred on dining, cultural elements and leisure activities.

The programme is designed to provide a structured yet relaxed approach to the celebration, with a focus on shared experiences and engagement with the island environment. According to the resort, the initiative aims to bring together cultural traditions and hospitality offerings within a resort setting.

A central feature of the programme will be the Eid al-Adha Feast, a dining experience presenting a selection of dishes prepared for the occasion. The event will be set in a themed environment reflecting elements associated with Eid.

The resort will also introduce an “Eid Gift with Purpose” initiative, positioned as a gesture aligned with the values of giving and reflection associated with the occasion.

In addition, guests will have the option to participate in a Guest Archery Competition, offering a recreational activity designed to complement the island setting and provide an alternative form of engagement during the celebration period.

Alongside the programme, the resort has launched an “Eid Island Escape” offer, which includes a range of inclusions for guests staying during the period. These include a 30-minute jet lag recovery massage, daily breakfast at Raha Market, dinner on a dine-around basis across selected restaurants, and a one-time floating breakfast experience.

In a statement, the resort’s management said the programme is intended to reflect the values of togetherness and reflection associated with Eid al-Adha, while offering guests opportunities to spend time with family and participate in shared experiences.

Through the three-day programme, Sirru Fen Fushi – Private Lagoon Resort is presenting Eid al-Adha as a combination of dining, leisure and cultural activities within a resort environment.

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Reethi Faru Resort awarded Green Globe certification

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Reethi Faru Resort has received Green Globe certification, recognising its compliance with international standards for sustainable tourism.

The certification reflects the resort’s stated commitment to responsible hospitality, with a focus on environmental management, social responsibility and operational practices across the property.

Green Globe certification is awarded following an assessment based on established sustainability criteria and verified through independent third-party audits. The standard reviews performance in areas including environmental management, energy efficiency, resource conservation, community engagement and sustainable operations.

With the certification, Reethi Faru Resort joins a group of hospitality operators worldwide that have met Green Globe’s sustainability requirements and demonstrated an ongoing commitment to improvement in tourism practices.

In a statement, the management of Reethi Faru Resort said the recognition reflects the resort’s continued focus on preserving the natural environment of the Maldives while maintaining the guest experience. The management added that sustainability forms part of the resort’s daily operations.

The Green Globe standard includes more than 40 core criteria supported by over 380 compliance indicators, providing a framework for assessing sustainability performance in the hospitality sector.

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