How to set the Best available rate for your hotel?

While you have a running hotel with history and forecast to back you up, you will have information to help you with setting the best available pricing for your property.

However if you find yourself in a situation of opening the hotel or reopening the hotel as is the case for most of you after COVID – 19 most of your history and forecast is not going to help. In those times you have to address the issue a little differently.

In this article we will take a look at how to set the BAR ( Best Available Price) for your hotel if you have no history or forecast

Begin with the Market Overview

If you are a new entrant to the market, understand the strength of the market or destination you are in. Prior to building your hotel, you must have done some feasibility to let you know some demand and supply aspects of the market.

Between the time you started building to the time you actually open the hotel, the market may have changed so do a proper survey on the situation of the market.

Some points to make note of are:

  • What is the general condition of business or tourism in your market. Is it going up or down?
  • How many visitors come into the city? Why do they come into the city
  • How do visitors reach your hotel. By road, train or flight
  • What are the top 10 source markets for the city?

A simple search with google and google maps will give you many of the details you are searching for.

Google search the name of the town + companies or attractions and you will see many results.

And with just a map like this you can easily see that since there is no airport, many of your guest will come via road or by train.

Understand your Competition

The first step is to understand your competition. You should understand their Strength and Weakness (SWOT analysis) . Compare this and their offering to build a rough estimate of your price.

While doing this exercise, make sure you understand who your real competition is to get to the correct pricing.

Visit each hotel, sit in the lobby, understand their guest feedback from social media sites or Trip advisor etc.

Once you have understood your strength and weakness versus the competition, you can start to build up your best available rates.

Shop online rates

The next step is to understand the competition pricing. Unsurprisingly you have plenty of online data available with you. Just head to any Online travel agent (OTA ) website and note the pricing for your competitors.

If you have some additional data points from a rate shopper tool, it will tell you the market occupancy and competition pricing for the next 90 days. It is crucial to understand the future demand and we will come to why in just some time.

This is a good place to start. Of course there are also other ways to start by understanding what your cost are and building up from that, but by doing that you may either out-price or undersell yourself.

Build your strategy

Once you have understood the price and strategy of your competitors, it is now time to understand your marketing strategy and set your pricing.

High level decision are made at this stage. What is the market segmentation you want to target.

I am sure you understand that every decision has a cost attached. If you decide more OTA business, then you are paying more in commission.

If you decide more sales team members, you are paying for their salaries and also the reach will be restricted to local markets.

You have to decide what mix you want to give to your hotel

This will be a critical step in pricing your hotel.

Once you understand the impact of the market mix, you will be able to set your best available rate correctly.

As a general rule, the online rates are your best available rates. That would mean that your wholesale partners and corporate clients will look to that to establish a discount percentage while negotiating.

What to do if the pricing does not work?

So till now you did you survey, understood the competitor pricing and decided on the pricing. The grand opening date came and went and the customers do not seem to be really buying on your price.

So what should you do?

Remember we spoke of the importance of looking into the future. This is where it comes handy. You will be able to see if the lack of pick you is due to a natural slowdown in demand or you need to correct your prices.

Before changing your best available rate online, make sure you have achieved a property score of 90+ on all OTA. This will mean, getting the images right, the property description and feedback in place.

Try and run some promotions in partnership with the OTA or build your brand on social.

If you have tried everything, then may be it is that you have priced yourself too high. It may be worthwhile to look at your previous steps again and decide the right pricing for your hotel, with some renewed information.


Setting your hotel Best available rate is an art and science. If you follow the guide, you will get it more or less right. Hotel business can be very dynamic and a few small mistakes can hurt you in the long run.

But the key is to keep monitoring the dynamic pricing and make changes and develop a system to help get your pricing right

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