Discounting is an effective way to boost bookings when demand is soft. However, if underutilized or mismanaged, it leads to lost bookings and underpriced rooms. 

In the guide, we explain how to adopt a strategic approach to room discounting, balancing occupancy and average rate to maximize revenue. 

Here are a few of the topics we cover. 

What Is Hotel Room Discounting?

Discounting involves lowering room prices to increase demand. It’s used to:

• Attract the attention of travel shoppers
• Convert more bookings
• Lure business away from competitors

Strategic Discounting 

Instead of offering constant promotions and across-the-board price cuts, hotels can earn more revenue by being more strategic and targeted in discounting.

Rate Fences 

Rather than offer the same rates to all guests, target specific segments by offering a variety of rate plans and featuring rate fences – conditions travelers must meet to qualify for special rates. 

Rate fences can be physical, like room type or view, or non-physical, like customer, transaction, and time characteristics. 

Types of Discounts

Common discounts include:

• Direct-booking discounts
• Length-of-stay discounts
• Early bird discounts
• Non-refundable discounts
• Last-minute discounts
• Premium room discounts

Hotel Room Discounting Tips and Strategies 

Here is a sampling of the 12 tips we share in the guide:

• Plan ahead to anticipate demand patterns throughout the year.
• Monitor competitor rates to gauge market demand and pricing.
• Target specific dates and room types where pick-up is slow.  
• Use stay restrictions to ensure discounts are available only when you need a boost.
• Use percentage discounts rather than fixed amounts. 
• Offer value-adds as an alternative to price reductions.

Make Pricing Easy with Revenue Management Solution

Revenue management solution takes the anxiety and guesswork out of pricing management. The software manages daily room rates on behalf of your hotel, ensuring you’re always priced optimally. 

Priced Right, Every Night 

To learn more about these important pricing terms and strategies, check out our guide, Maximizing Hotel Room Revenue with Strategic Discounting.