Dynamic Pricing and Loyal Guests: Finding the Right Balance

Are you worried about losing your regular guests when you change your room rates? You’re not alone. Many hotel owners feel the same way.

When you look at empty rooms at the end of the day, it hurts your business. But when you raise prices during busy times, you worry about your loyal guests feeling cheated. Let’s talk about how to handle this common problem.

What Your Guests Already Know About Pricing

Your guests already understand that prices change. They see it when they:

• Book flights
• Order an Uber during busy hours
• Stay at hotels during high season or big events

What they care about isn’t that prices change - it’s understanding why they change. When guests understand the reason for a price increase, they usually accept it.

How to Use Dynamic Pricing Without Losing Loyal Guests

Here’s a simple breakdown of what works for hotels of all sizes:

Simple Tools That Make Dynamic Pricing Easier

You don’t need complicated systems to get started. Here are the basic tools that help:

1. Your PMS (Property Management System): Use it to track who stays with you regularly
2. A simple RMS (Revenue Management System): Helps suggest the right prices based on demand
3. Your booking engine: Make sure it clearly shows why prices are different
4. A Channel Manager: The best hotel channel manager will keep your rates consistent across all booking platforms

Many hotels implementing efficient revenue management strategies for independent hotels see a 15-20% increase in revenue just by using these basic tools correctly.

The AxisRooms Advantage for Loyal Guest Pricing

Many hotels we work with have found success using AxisRooms’ Revenue Management System for this exact challenge. Their system lets you create special rate plans just for returning guests that stay protected even when standard rates increase. This means during festival weekends or high season, your regular guests still feel valued with better rates, while you maximize revenue from new bookings. With seamless OTA integrations, the best channel manager for hotels should offer a simple dashboard that shows everything clearly without requiring technical expertise.

How to Talk to Guests About Price Changes

When guests ask about price changes, keep your answers simple:

“Our rates change based on how busy we are, just like airlines and other hotels. We always try to offer good value for the price.”

For your loyal guests, a personal approach works best:

“We notice you’ve stayed with us several times, so I’ve added a special discount/upgrade to thank you for your loyalty.”

Real Examples from Real Hotels

Small hotels are using dynamic pricing successfully every day. A 30-room hotel in Florida increased their revenue by 22% while actually improving their review scores by explaining their pricing clearly to guests.

A mountain resort found that adding free welcome drinks during high-rate periods completely eliminated complaints about seasonal pricing. Following channel management best practices, they maintained consistent pricing across all booking channels while still offering special rates to loyal guests.

Another success story comes from a boutique hotel in California that started simple with weekend rate adjustments. They began by raising Friday and Saturday rates by just 15% during their busy season. Within six months, they expanded to full dynamic pricing and saw their RevPAR increase by 18%. The key was their approach - they sent personal emails to their regular guests explaining the changes and offering them early booking discounts.

A family-run inn in Vermont took a different approach. They kept their loyal guest rates stable but added premium services during peak periods. When leaf-peeping season arrived and demand soared, they maintained regular rates for returning guests but included complimentary afternoon tea and local attraction tickets. This strategy increased their overall revenue by 25% while actually improving guest satisfaction scores.

Common Mistakes to Avoid

Many hotels make these pricing mistakes that hurt both revenue and guest relationships:

Changing prices without warning. Your regular guests should never be surprised by a rate increase. A simple email or phone call explaining upcoming busy periods goes a long way.

Treating all guests the same. Your guest who books twice a year deserves different treatment than someone booking for the first time. Use your guest history to create different pricing approaches.

Focusing only on the lowest price. Many hoteliers think they need to match the cheapest rate in town. Instead, focus on providing better value. A slightly higher rate with free breakfast often wins over a bare-bones cheap rate.

Not training your staff properly. Your front desk team needs to understand and explain your pricing strategy confidently. If they sound unsure or defensive, guests will feel uncomfortable.

What Your Loyal Guests Really Want

Your regular guests want three things:

1. To feel recognized
2. To understand why prices change
3. To get some extra value for their loyalty

They don’t expect the same price year-round. They just want to feel valued.

Getting Started with Dynamic Pricing

1. Start small: Adjust rates just for weekends or special events
2. Create a simple loyalty offer: Even a 10% discount for returning guests helps
3. Train your front desk team: Make sure they can explain pricing changes
4. Monitor guest feedback: Watch reviews for pricing complaints
5. Adjust as you learn: Find what works for your specific property

Using the best channel management software will make implementing these steps much easier across all your distribution channels.

Making Smart Pricing Decisions

Measuring Your Success

How do you know if your dynamic pricing strategy is working? Look at these key numbers:

Revenue per Available Room(RevPAR) should increase over time. Don’t just look at monthly numbers - compare the same periods year over year to account for seasonal changes.

Guest satisfaction scores should stay stable or improve. If your review scores drop after implementing dynamic pricing, you need to adjust your approach.

Repeat guest percentage is crucial. If fewer guests are coming back, your pricing strategy might be too aggressive.

Direct booking percentage should increase as you offer better value than third-party sites. This also saves you commission fees.

Track these numbers monthly and adjust your strategy based on what you see. Remember, the goal isn’t just higher rates - it’s better overall performance.

Building Long-Term Success

Dynamic pricing works best when it’s part of your overall guest experience strategy. The most successful hotels don’t just change rates - they change the entire value proposition based on demand.

During busy periods, consider adding services that cost you little but mean a lot to guests. Welcome drinks, room upgrades for loyalty members, or late checkout can justify higher rates while making guests feel special.

During slower periods, focus on attracting new guests who might become regulars. Offer packages that showcase your property’s unique features. A “local experience” package with restaurant recommendations and attraction tickets can command higher rates than a basic room-only offer.

The Bottom Line for Your Hotel

Dynamic pricing isn’t about charging the highest price possible. It’s about charging the right price at the right time. Your guests understand this concept.

When you combine smart pricing with good guest relations, you create a winning hotel revenue strategy. Your revenue improves, and your loyal guests still feel valued.

Remember: Dynamic pricing and guest loyalty can work together perfectly when you focus on communication, transparency, and adding value for your best guests.

The most successful hotels don’t see dynamic pricing as just a revenue tool - they see it as part of their overall guest experience strategy. When done right, it helps you serve your guests better while building a more profitable business.

Frequently Asked Questions