Decoy Pricing helps increase number of rooms sold as well as increasing in ADR (Average Daily Rate) for my and clients' small hotel.
Decoy Pricing in hotel business context is influencing guests to book more expensive room types.
We influence them by presenting a less attractive room type with slightly cheaper price.
For example, at Buasri Boutqiue Patong, we used to offer:
- Superior Room
- Superior Room with Pool View
We noticed that Superior Room are more popular.
This room type tend to sold out faster than others.
We often have to upgrade to Superior Room with Pool View to free up our starting room type.
This is where Decoy Pricing comes into play.
We wanted to influence guests to book more Pool View room by making Superior Room unattractive.
We decided to:
- Change room name: Superior Room -> Superior Room - No View
- Lower the gap between 2 room types: 15% diff -> 10% diff
The result:
April 2023
Superior Room’s occupancy = 89%
Superior Pool View Room’s occupancy = 72%
April 2024
Superior Room’s occupancy = 93%
Superior Pool View Room’s occupancy = 94%
Not only this year's overall revenue increased, but the occupancy of our Pool View rooms also balanced with Superior Room.
We successfully influenced guests to book higher room type and generated more revenue for the hotel.