In this article · 7 sections
Most small hotels set one rate and change it only when someone complains. Good hotel room pricing follows demand: higher when the city is full, sharper when it isn't. You don't need expensive software to start.
Step 1: Know your floor
Calculate the minimum rate that covers per-night costs (housekeeping, laundry, electricity, toiletries, OTA commission). Never sell below it except to fill a last-minute empty room that would earn nothing.
Step 2: Set a base rate per room type
Compare 5–6 similar hotels nearby on Google and OTAs for the same dates. Position yourself honestly: if your reviews are stronger, you can price slightly above.
Step 3: Add simple rules
| Situation | Adjustment |
|---|---|
| Friday–Saturday (leisure towns) | +10–25% |
| Festivals, melas, local events | +20–60% |
| Wedding season weekends | Higher rates, plus minimum 2-night stay |
| Weekdays off-season | –10–20%, or add breakfast instead |
| 3+ night stays | Small discount |
Keep a yearly event calendar for your city: exams, gurpurabs, fairs, cricket matches, wedding muhurat dates.
Step 4: Watch pickup
Each week, check how many rooms are booked for the next 30 days. If dates are filling fast, raise rates early. If they are slow 7–10 days out, run a weekday offer.
Step 5: Channel rates
Many hotels keep OTA prices slightly higher than their own site to cover commission. Check your OTA contract for parity terms first. See OTA commission explained.
Measure the result
Track occupancy, average daily rate and RevPAR monthly, not just "rooms full". See Occupancy, ADR and RevPAR.
FAQs
Should I use dynamic pricing software?
Above 20–25 rooms or in busy tourist towns it often helps. Smaller properties can do well with these rules and a weekly review.
Does GST change with price?
Yes. Room nights above ₹7,500 move to a higher slab. See hotel GST explained.
Was this article helpful?
Your answer helps us improve our guides
