In the increasingly competitive hospitality world, pricing strategy is no longer simply about setting the "right" price or following competitors' prices. In fact, many hotels still make fundamental mistakes that make it difficult to compete, both on OTAs and direct channels. The result? Declining occupancy rates, stagnant ADR, and lost revenue potential. Here are the most common pricing mistakes that leave hotels empty-handed, along with how to avoid them.
1. Setting Prices Based on Feeling, Not Data
One of the biggest mistakes is setting prices simply because "it's usually like that," relying on past experience, or guessing at demand. Yet, room demand changes rapidly, influenced by events, holidays, booking windows, traveler preferences, and even online search patterns.
Without analyzing the data, prices can be too low (lost profits), or too high (low occupancy), or even unchanged even though the market is changing daily. Modern hotels must switch to dynamic pricing based on real-time data.
2. Following Competitor Prices Without Analysis
Competitors raise prices → hotels follow suit. Competitors offer discounts → hotels follow suit.
While it may seem safe, this strategy is dangerous because:
Competitors have different segments
Room quality is not the same
Their demand may not be the same
They may implement the wrong strategy, but the hotel will be dragged down with them
The result? Hotels lose positioning and margins. It's better to use competitor data as a reference, not a determinant.
3. Not Using Dynamic Pricing
Many hotels still use flat rates:
Weekday = one price
Weekend = one price
High season = one price
This model is no longer relevant because guest behavior changes hourly.
Dynamic pricing allows hotels to adjust rates based on:
Room availability
Daily demand
Online searches
Competitor trends
Without dynamic pricing, hotels are simply operating "manually" and missing out on revenue opportunities.
4. Too Many Discounts on OTAs
Many hotels fall into the trap of offering large promotions on OTAs in the hope of increasing occupancy. The problem:
Margins are getting thinner
Commissions remain high
Guests are increasingly accustomed to buying from OTAs, not websites
If this habit continues, it will become increasingly difficult for hotels to generate profits, and their direct booking strategy will struggle to thrive.
5. Website Rates Are Not More Attractive than OTAs
This is one of the most fatal mistakes.
Ideally:
Website = best offer
OTA = additional channel
But many hotels actually set the same or even higher prices on their websites. As a result, guests choose OTAs over direct.
To make your website win:
Provide additional benefits (free upgrades, breakfast, souvenirs, credits)
Provide cancellation flexibility
Display real-time availability
If your website isn't optimized, hotels will continue to lose out in the hotel e-commerce market.
6. Lack of an Upsell & Add-On Strategy
Revenue doesn't stop with the room. Many hotels miss out on upsell opportunities such as:
Floating breakfast
Romantic dinner
Spa
Airport transfer
Early check-in / Late check-out
Upsells not only increase revenue but also enhance the guest experience. Hotels that don't utilize upsells will miss out on 20–30% potential profit.
7. Lack of Coordination Between Revenue, Sales & Marketing
Pricing errors often occur because departments work in silos.
Example:
Revenue raises prices, but marketing is running a promotion
Sales offers group discounts, but no adjustments are made by the channel manager
Advertising is running, but pricing is out of sync
Modern hotels must view pricing as part of their hotel marketing strategy, not just revenue management.
8. Managing Pricing Manually
Too many hotels still manually change prices on:
OTAs
Channel Managers
Websites
Group promotions
Packages
This is time-consuming and often results in errors (broken rate parity, incorrect prices displayed, etc.). Modern solutions, such as systems from ecommerceloka, allow for:
Pricing automation
Real-time rate syncing
Demand forecasting
Direct booking optimization
Hotels that use automation are much faster and more competitive.
If a hotel is experiencing a lack of guests, the cause isn't just promotions. It could be misguided pricing. Avoid the mistakes mentioned above and implement modern revenue management based on data, technology, and marketing strategies. With the right pricing, hotels can not only increase occupancy but also sustainably increase revenue.