Pricing strategy 2025: How to set the most profitable rates for your hotel

Prices that worked in 2024 may not be as effective in 2025 for a variety of reasons. Travelers' tastes and habits may evolve, new competitors may enter the market and change local dynamics, or your property may have introduced new services that increase its perceived value.

While simply "copying and pasting" old rates is almost never the right choice, in some cases, revising your pricing strategy is a must to maintain high profitability and competitiveness. Here's a look at some of them:

If your facility is in the process of renovating rooms, common areas, or facilities, perhaps because you are targeting a higher-end clientele, your prices need to reflect this change.

In your case, a well-reasoned increase will help you increase perceived value and attract guests who are not only willing to pay more for a room, but are likely to be more open to purchasing additional services and experiences. Of course, the increase must be well justified by a real improvement that the guest can perceive. For example, if the renovation only affects certain areas of the property at first, you might choose to increase rates gradually.

If your facility's reviews have shown a significant negative or positive trend, you can take action by adjusting your pricing strategy.

For example, a decline in expressed approval might require you to revise your pricing to improve value and regain customer confidence. Conversely, if ratings have improved significantly, you may decide it is time to test customers' willingness to pay a slightly higher price.

If you plan to change the opening period of your accommodation, you will necessarily need to update your prices.

For example, if this year you opened in May and closed in September, while in 2025 you plan to open in April and close in October, you should analyze demand trends in the "extra" months and set new prices that are competitive.

Analyzing demand trends in 2024 is not only important if you want to change the opening period, but also to identify any new peaks that emerge during the year or to confirm "traditional" peaks for your destination (such as during holidays or local events).

The best way to do this is to create your occupancy curve, which is a graph that allows you to track your booking history and quickly make comparisons of your occupancy rates over the past year.

Here is an example of the occupancy curve you can get in just a few clicks with Smartpricing's dynamic pricing and revenue management software.

If you want to understand exactly how to create your occupancy curve, you can read our article on how to use the booking window to increase bookings.

As mentioned in the previous section, a key activity in determining your pricing strategy in advance is to analyze your record. Every lodging property has unique characteristics that directly affect pricing, so the best place to start is to understand what has worked and what hasn't in previous years.

This analysis, combined with knowledge of your market and the goals you have set for the new year (e.g., increase bookings, boost occupancy, change target clientele, etc.), will help you establish "starting" prices, i.e., those that are ideal for you, for each room type, and for each specific time of year.

However, you must always keep in mind that these prices cannot remain static: the estimates you make today may not be valid in a few months. That's why you need to constantly monitor booking trends and market fluctuations to dynamically adjust your starting prices. This is the only way to ensure that they remain profitable even when conditions change.

Especially when done manually, this is a complex and very time-consuming task of continuous revision compared to the immediacy of a fixed price list. However, it is the only way to ensure that you are realizing the full potential of your accommodation.

Using dynamic pricing and revenue management software is the best way to set your hotel's rates faster and more effectively, both now and in the long term.

In fact, with the help of technology, you can focus on the strategic part and leave the complexities of data analysis and constant price adjustments to the software.

For example, with Smartpricing, all you have to do is go to the "Starting Prices" section of your "Accommodation Settings" panel, and you will have all the starting prices suggested by the algorithm for each of your room (or apartment) types at your fingertips.

Depending on the strategy you want to follow in 2025, you only need to determine:

• For which room type and for which period you want to change the suggested starting price

• And what kind of change you want to make

If instead of acting on a single period you want to change the prices of several periods, you can do so simultaneously with just a few clicks:

• You will need to select all the periods you want to act on

• Then, moving to the “Periods and Prices” section, you will be able to select the room/apartment you are working on and establish the change you want to apply, in absolute terms (€) or percentage (%)

Once you have modified (or confirmed) the starting prices suggested by Smartpricing's algorithm, your pricing strategy for 2025 is ready.

In fact, the software will use these starting prices as the basis for calculating the prices of each of your room/apartment types from that time for 500 days forward.

Immediately after editing, you will see a preview of the suggested strategy and published prices.

But that's not all: Smartpricing's algorithm will continue to cross-reference your internal booking data with external data (market trends, impact of events and holidays) to constantly adjust your prices and respond promptly to any changes or fluctuations in demand in 2025.

Right now there are over 3,000 hoteliers in Europe who have already set up their pricing strategy using the Smartpricing features you just saw and have already opened bookings for 2025.

They have the peace of mind that their prices are always optimized and that they can easily take action on their strategy at any time of the year, in just a few clicks. How about you?

Want to have a closer look at how Smartpricing works and how it could help you increase revenue by +30% on average? Request a free personalized demonstration!