This article helps the user set up and manage the default minimum and maximum prices within the Rooms Setup tab in RoomPriceGenie.
Why is setting your Maximum/Minimum Prices important?
Control
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 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.
Variable Cost
First of all, the variable costs are the extra costs associated with having a client in the room rather than having an empty room. They take into account what it costs you to clean or maintain a room, the cost of breakfast, utilities etc. Also, they should include any OTA commissions you are paying.
You may wonder why we ask for your variable costs. Our system always aims to optimise for profit, not only for increasing revenue. And thus, when optimising your revenue, we want to make sure that these costs are taken into account and that you make enough profit on each room sold. In some cases, it makes more sense to sell fewer rooms at a higher price than to sell more rooms at a lower price.
For most properties, we recommend setting the variable cost to at least 50% of the Minimum Price. If your prices are going too low for your preference, you can raise them to up to 80% of your Minimum price.
How do I set Individual Minimum and Maximum prices within RoomPriceGenie?
Note: Our Starter plan only allows setting the Minimum and Maximum Prices for your Reference Room Type. The other room categories will be derived according to your derivation rules. Example: 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.
Advanced and Professional users can type in the general Minimum and Maximum prices for each room type.
Setting Minimum and Maximum Price for the Reference Room
Setting Minimum and Maximum Price for your Derived Room(s)
NOTE: Please note that the above feature is available to Advanced and Professional users only.
If you are not able to locate the Minimum and Maximum price options for your derived room types despite being a higher plan user, it is highly likely that this feature hasn't been activated for your account yet. Please contact us to get this custom feature activated for your account right away.