What is the price per room

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What makes up the price per room

The price of a hotel room is made up of fixed and variable costs, it is also influenced by the tariff policy, sometimes quite radically.

Required terms

Fixed costs do not depend on sales, season and number of guests. These are taxes, rent for premises, depreciation. Another thing is the variable costs that are directly related to the load of the hotel. These include laundry, groceries, electricity and water bills. You can also include the payroll here – usually in the high season you need to hire more staff, and in the low season, on the contrary, reduce the number of employees.

The basis of the tariff policy of the hotel is always the cost of the room: the sum of all costs divided by the number of rooms. Based on the received figure, all tariffs are calculated. It is unprofitable for the hotel to lower the price below the cost price: in this case, it is better not to accommodate guests at all than to work at a loss.

Some more, some less

The tariff policy uses dynamic pricing – the same room costs differently depending on the season, day of the week, client category and booking depth. For example, guests who check in without prior reservation pay the maximum at the front desk. Those who booked a room at a non-refundable rate a month in advance receive a significant discount. Weekends tend to cost more than weekdays. There are discounts for long stays, for tourist groups, corporate clients.

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Booking systems play a significant role – often they are ready to offer a better price for a room than when contacting a hotel directly. This is because large aggregators have many regular customers for whom loyalty programs work: it is often the aggregator that becomes the main and almost the only supplier of new customers for the hotel. So the hotel is forced to make price concessions for the clients of Booking, Expedia, Agoda and other giants in order to ensure a good load.

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