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Rising hotel rates: when will how much become too much?


With the pandemic behind us, hotel room rates have been increasing to keep pace with revenge travel. Travelers are paying prices that far exceed 2019 rates or any ever seen previously.

 

Will this trend continue or slowly go away as ‘revenge travel’ diminishes? Are these high rates here to stay?  At what stage will the ever-increasing hotel room rates trend become counterproductive?

 

Hotel revenue management experts warn that the higher-than-average prices are unlikely to last forever as consumers won’t put up with this even if they have the money.

 

“It’s about price” everyone groans. I have heard that more times than I’d care to remember; it’s not; it’s about value. Value is a price – I’m happy to pay for what I get as long as it meets my expectations. Very recently, I stayed at a hotel which charged me a room rate that was nearly twice what I had paid when I stayed there previously.

 

Paying that much for the room, I expected things to be twice as good, but they were not and I took it up with the hotel. I was told that after Covid and the ongoing economic crisis, costs have risen well above 50 percent. Fair enough, hotels need to factor that into the revenue part…but there is no excuse for diminishing the quality of the guest experience.

 

Even though I paid more on my recent hotel stay, I felt that I was not receiving more! While the hotel increased the monetary value of the stay, it hardly did anything to make me feel that I was getting more value for my bucks in terms of my overall stay experience.

 

For instance, during my stay in the hotel, I found employee responses for someone who is on a   repeat visit totally lacking. Providing that extra touch of hospitality is personalised messages - for example, pre-arrival emails that spell out what the guest can see and do (both within the property and in the locality) during their stay, costs nothing. On arrival, what would it have cost the hotel to place a small fruit platter in my room when I checked in?

 

Value is the key as we move forward. That little bit of attention to detail that's personalized to me specifically can go a really long way,  especially as  hoteliers now have the technology and capacity to do that… and more, in an effective way. 

 

Guests are back to pre-pandemic expectations; you have to execute at the highest level, and that includes focusing on value and making sure that your staff understand that! Research indicates that whilst hotel room rates continue to increase amongst inflation and high demand, there s a considerable drop in guest satisfaction.

 

As hoteliers know, in this new, ultra competitive environment, if customer service levels fall dramatically, it will only lead to customers pushing back on higher rates. Let’s not forget, after all, that high room rates and high customer service levels go hand-in-hand.

 

One without the other just doesn’t work.

 

Shafeek Wahab – Editor, Hospitality Sri Lanka, Consultant, Trainer, Ex-Hotelier

 

 

 

 



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