This article explains what the Base Price is, how it affects the price recommendations and how to set the base price.
What is the Base Price?
The Base Price is important as it is the starting point for our price calculation. Consider it an average price for your reference room/rate for the year. In the high season, your price will be higher than the base price, and in the low season, it will be lower. We adjust your price throughout the year to consider the different demands, but the base price is set to be the average.
We also set a minimum and maximum boundary to the algorithm so that when you are in your low season, the prices will drop more towards your minimum, and when you are in your high season, the price recommendations will be higher. But again, that is dictated by the demand in the area and, of course, your occupancy.
How is the Base Price set initially?
When we initially set the base price, we looked at what you have been doing already. We take your current average over the year and add 3% to aim for a higher ADR. When we set your RoomPriceGenie account, we can pull data from your PMS/Channel Manager, and based on the prices we see, we determine the base price.
Why would I change it?
In general, we do not recommend changing your base price often. There are more targeted ways to affect pricing.
However, if you feel that your prices are too high all year round, you can drop the base price, which will lower all the prices all year round.
Alternatively, many hotels would do better if they charged a little more on average. To increase your prices all year round, raise the base price.
For example, if you want your prices to be 3% higher and your current base price is $100, then you can increase your base price to $100*(1.03) = $103.
Why would I not change it?
Often, clients like to change their prices for a certain period of time rather than for the whole year. In this case, we don’t recommend changing the base price! Instead, we offer specific features such as general adjustments for a specific day of the week or for a whole month (for more info, click here) or changing the price recommendation for a specific time in the Price Pop-up or in the Adjustment Calendar (for more info, click here).
Where can I find it?
The Base Prices are visible in several sections.
- Pricing Strategy >> Room Setup:
In the Room Setup, you can view and edit the Base Price for all your room types on one screen.
- Chart:
The Chart view provides a clear overview of pricing for the next 365 days. The base price is indicated by a black line in the price chart.
- Price Pop-Up:
When you select any date in the Calendar view, the base price will be displayed in the Price Pop-up. The Base Price serves as the starting point for our calculations.
- Price Calendar:
If you move the mouse over the individual days in the calendar view, information about the pricing is displayed. The base price is again at the top of the list.
Where do I change it?
1. In the navigation bar, navigate to "Pricing Strategy"
2. Click on Room Setup
3. Select your Reference Room category from the list
4. In the tab "Pricing Setup", update the Base Price
5. Click on "Save" on the bottom right
After changing your Base Price, you can return to the Price Calendar. Your recent changes will be shown after the prices are automatically recalculated based on the newest framework. Therefore, we recommend you look at the price chart and evaluate the new price level.