How to set your minimum and maximum prices
Why setting your Maximum/Minimum Prices is important
- We want you to have full control. In setting your individual minimum and maximum prices, you are giving us the range within which we can calculate our pricing suggestions. The system will not go below or above your set limitations and this way we can make sure you feel comfortable with the prices we give you.
- Psychological reasons: If you allow the prices to go too low, your guests will consider this as your reference price. As a result, it will be harder to charge normal prices again later on. If you’re charging very high prices, even if you can because of high demand, people tend to be less happy, or consider the prices as unfair. In a worst-case scenario they may even leave bad reviews. If you want to learn more about the psychology behind the price levels, you’ll find more detailed explanations in our blog article.
- You have more control over your pricing strategy. For example, some people want to sell their last rooms, and therefore set fairly low minimum prices. Other people want to keep a certain reputation and will set their Minimum Price higher.
Our basic plan only allows to setting Minimum and Maximum Prices for your Reference Room Type. The other room categories will be derived according to your derivation rules (see next paragraph).
If the Minimum Price of your Reference Room Type is $100, and your derived single room is 20% cheaper, then the Minimum will be $80.
The more advanced plans provide much more control, and allow to set individual Minimum and Maximum prices for every room type, and even more granular for a specific date or date ranges (seasons).
First of all, the variable costs take into account what it costs you to clean or maintain a room. For example Housekeeping expenses. For most properties, those costs amount to around 20-40% of their Minimum Price. You may wonder why we ask for your variable costs. Our system always aims to optimize for profit, not only for increasing revenue. In some cases, it makes more sense to sell fewer rooms at a higher price than selling more rooms at a lower price.