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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
Reethi Faru Resort has welcomed the festive season with its annual Fruit Mixing Ceremony, marking the beginning of a programme of celebrations, activities and experiences for guests visiting the resort during the Christmas and New Year period.
The resort has prepared a series of festive events and activities catering to guests of different ages and interests. Families will have the opportunity to participate in Christmas tree decorating, creative workshops and gingerbread house making, while couples can enjoy evening walks along beaches decorated with festive lights.
The festive programme will include a Christmas dinner and a New Year’s Eve gala, followed by a DJ party to welcome 2027. Guests will also be able to participate in coral planting activities alongside a marine biologist, providing an opportunity to learn about the island’s marine ecosystem and contribute to conservation efforts.
For guests seeking relaxation, the resort will offer yoga sessions and spa treatments, while those interested in outdoor activities can participate in water sports, island excursions, sports challenges and PADI diving experiences conducted by certified instructors.
Other events scheduled during the festive period include Reethi Faru Resort’s anniversary celebration, a Christmas Tree Lighting Ceremony and the arrival of Santa Claus. The programme will also feature live music, Maldivian cultural performances, outdoor movie nights and a selection of dining experiences.
According to the resort, the festive programme has been designed to bring together traditional Christmas and New Year celebrations with activities that highlight the Maldives’ natural environment and cultural heritage.
Through its combination of festive events, recreational activities, marine conservation initiatives and dining experiences, Reethi Faru Resort aims to provide guests with opportunities to celebrate the holiday season while experiencing island life in the Maldives.
.Here Baa Atoll, a private island retreat in the Maldives, has been named the No. 6 Resort in the Indian Ocean in the Condé Nast Traveler Readers’ Choice Awards 2026.
The annual Readers’ Choice Awards recognise hotels, resorts, destinations, airlines and other travel experiences based on votes submitted by Condé Nast Traveler readers.
The recognition places .Here Baa Atoll among the highest-ranked resorts in the Indian Ocean and comes during a milestone year for the property.
Located within the UNESCO Biosphere Reserve of Baa Atoll, .Here Baa Atoll comprises nine residences spread across two natural islands, Somewhere and Nowhere.
Somewhere features seven three- and four-bedroom residences extending from the beach towards the lagoon and designed for families and groups travelling together. Each residence offers indoor and outdoor living spaces, multiple pools, private dining and personalised Roohu service. Guests are transferred directly to their residence by private speedboat, avoiding a conventional lobby and check-in process.
Condé Nast Traveler has previously highlighted the resort for its emphasis on privacy, its beach-to-lagoon residences and its discreet approach to luxury.
The resort experience also includes Nowhere Private Island, which is reserved exclusively for a single group at a time. The island features a five-bedroom Presidential Residence and a three-bedroom Lagoon Residence, providing eight bedrooms and 3,329 square metres of private living space, supported by dedicated service and individually curated experiences.
The Readers’ Choice Award follows several other recognitions received by .Here Baa Atoll during 2026. The resort was included in the Condé Nast Traveler Hot List 2026, with the publication highlighting its residences and design. It has also received international recognition for its architecture and design, alongside creative collaborators Kulör Group, Muza Lab and Topo Design Studio.
Elina Adiyan, Resident Manager of .Here Baa Atoll, said: “To be recognised by the readers of Condé Nast Traveler so early in our journey is incredibly meaningful. .Here was created around a simple idea: to give guests extraordinary space, genuine privacy and the freedom to experience the Maldives entirely on their own terms. This recognition belongs equally to our team, whose care and dedication bring that vision to life every day. We are deeply grateful to everyone who voted for us.”
The latest recognition adds to .Here Baa Atoll’s growing international profile within the luxury travel sector, with the resort positioning privacy, spacious accommodation, design and personalised service at the centre of its guest experience.
Reethi Faru Resort has announced three medal wins by members of its culinary team at the Hotel Asia Culinary Challenge and the FHAM Global Culinary Challenge.
At the Hotel Asia Culinary Challenge, Chef Rohit Kabdal received a Gold Medal in the Decorated Cake category, recognising his work in cake design, presentation and technical execution.
Chef Abhishek Sharma also represented Reethi Faru Resort at the competition, earning a Bronze Medal in the Hot Cooking Fish category.
At the FHAM Global Culinary Challenge, Chef Mayank Bijalwan secured a Silver Medal in the Dress the Cake category, adding a third medal to the resort’s recent culinary achievements.
The results highlight the range of skills within Reethi Faru Resort’s culinary team, spanning pastry, cake presentation and hot kitchen techniques.
According to the resort, participation in professional culinary competitions provides its chefs with opportunities to develop their skills, exchange knowledge and test their abilities alongside other industry professionals.
The achievements also form part of Reethi Faru Resort’s wider focus on dining and guest experience, with its culinary team involved across the resort’s restaurants and food and beverage offerings.
Reethi Faru Resort congratulated Kabdal, Bijalwan and Sharma on their respective achievements, describing the results as recognition of their commitment, technical ability and creativity.
The three medals add to the resort’s recent culinary accolades and reflect its continued emphasis on professional development within its kitchen team.
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