How to Be Brave and Lift Your Prices: Strategies for Accommodation Hosts
Raising prices can be a daunting step for many in the hosted accommodation industry. Whether it's the fear of losing loyal guests, being perceived as "too expensive," or feeling guilty about charging more, many hosts in Aotearoa hesitate when it comes to increasing their rates. However, lifting your prices is a natural and necessary step for growth, sustainability, and ensuring you're fairly compensated for the work you do.
Here are some personal and business strategies to help you overcome that fear and make the leap with confidence.
1. Recognise Your Value
One of the biggest reasons accommodation owners struggle with raising prices is self-doubt. It’s important to remember the value you provide. You’re not just offering a place to stay; you’re creating a unique experience.
Re-set your thinking:
List Your Unique Selling Points (USPs): Jot down what sets your accommodation apart - whether it’s a stunning location, personalised service, local expertise, or the overall vibe. Seeing this list can help you internalise the fact that what you’re offering is worth more than just a room rate.
Business Strategy:
Do a Value Audit: Take stock of the little extras that add to the guest experience. Freshly baked scones, your local recommendations, a peaceful garden - these all contribute to a premium experience and justify premium pricing.
2. Shift Your Mindset
Raising prices isn’t about being greedy; it’s about reflecting the quality of your offering, maintaining standards, and covering rising costs.
Re-set your thinking:
Reframe the Fear: Instead of worrying about losing guests, focus on what you stand to gain—a more sustainable business and guests who truly value what you provide. Charging a fair price allows you to reinvest in your property and deliver an even better experience.
Business Strategy:
Use Price Anchoring: Consider introducing different pricing tiers. Having a higher-priced option (like a premium room or package) can make your regular rates seem more reasonable by comparison.
3. Know the Market
Many hosts worry about pricing themselves out of the market, but it’s often the case that accommodation providers are undercharging.
Re-set your thinking:
Boost Your Confidence Through Research: Compare your rates with other accommodation providers in your region offering similar experiences. You may find that you’re actually charging less than the going rate, which can give you confidence to adjust upwards.
Business Strategy:
Use Rate Comparison Tools: Platforms like Airbnb and Booking.com allow you to monitor what others are charging in real time. Use these tools to keep your rates competitive, and don’t be afraid to tweak them during peak times.
4. Test the Waters Gradually
You don’t need to implement a big price jump all at once. Gradual increases allow you to gauge how your guests respond.
Re-set your thinking:
Test, test, test: Try increasing your rates incrementally, and keep an eye on how it affects bookings. Small, gradual changes are often easier to manage and less intimidating for both you and your guests.
Business Strategy:
Leverage Seasonal or Event-Based Pricing: Start by raising rates during peak seasons, holidays, or local events. Guests expect prices to be higher during these times, making it a good opportunity to test out an increase without resistance.
5. Communicate Clearly and Confidently
If you’re worried about how a price increase will be received by repeat guests, transparency is key.
Re-set your thinking:
Be Clear on the Why: Before you communicate any price increase, ensure you're clear on why it’s necessary. Rising costs of supplies, maintenance, or improvements to the property are all valid reasons.
Business Strategy:
Offer Enhanced Value: Consider adding a small upgrade or bonus (like a free breakfast or a special local experience) to soften the impact of a price increase. This helps guests feel like they’re getting even more value for their money.
6. Accept That Not Everyone is Your Ideal Guest
It’s natural to worry about losing regulars, but raising your prices can attract a different calibre of guest—those who are willing to pay more for quality.
Re-set your thinking:
Release the Fear of Rejection: You might lose some budget-conscious guests, but in their place, you’ll likely gain guests who appreciate the experience you offer and are happy to pay for it.
Business Strategy:
Focus on Your Target Audience: Take the time to clearly define your ideal guest. Whether it’s couples looking for a romantic retreat, adventure travellers, or eco-conscious visitors, adjust your pricing to reflect the value your ideal guest sees in your offering.
Final Thoughts
Raising your prices isn’t just about making more money; it’s about recognising the value of your service, maintaining a sustainable business, and providing a top-notch experience for your guests. With the right personal mindset and business strategies, you can overcome the fear and step into a more profitable and fulfilling business.
Take gradual steps, communicate with confidence, and trust that the right guests will see the value in what you offer.