Hotel Brand vs Room Price: Which One is More Important to Guests?

January 26, 2022

Brand and price have always been on opposing sides of every consumer good. Which one is more important? Which one will generate more revenue? Which will provide better customer satisfaction? 

For hoteliers, it’s the same problem they must contend with daily. Should they invest more in building their brand or focus on their pricing strategy? 

Here’s our take on the question. 


Hotel Room Rates Are Parameters At Best

In a study done by travel group Expedia, results showed that the majority of customers chose hotel room price as the determining factor in their booking choices. However, the answer is not as simple as always going for whatever is the cheapest option. 

Abhijit Pal, head of Expedia research says, “While consumers want the best deal on travel bookings, their individual selections ultimately reflect their values. The consumer searching for a budget accommodation will look for the best value within their constraints, while someone with more disposable income may prefer a luxury option and be willing to pay more per night, but not more than they have to.”

So if you think about it, ideal hotel room rates serve as parameters on how much people can spend but it can shift if they are offered something with more value at a reasonable cost. What they are willing to spend can change if paying a little bit more will provide them with a better experience. 


Customer Choices Reflect What They Value

Hotel brand, reviews, ratings, and reputation also play a part in the customer’s decision-making. Once a customer sets his room rate parameters, the hotels within that range are now competing on which one can provide the best experience. Whether it’s having bigger rooms, flexible check-in, or having more hotel amenities, customers will look into what they themselves value in a hotel. 

If a potential guest is traveling with a group, hotels that have bigger rooms or offer connecting ones will be a better choice than a less expensive hotel with a balcony but smaller room square-footage. The same logic can be applied to someone looking for a hotel near a particular attraction. Even if other hotels have “better” deals, if they don’t align with what the customer values, it’s not the best option for them. 


Creating A Strong Room Pricing and Hotel Branding Strategy

Because customers are becoming more price savvy, hotels should put in equal effort in marketing their brand and services within reasonable prices. Consider a hotel’s brand and your pricing strategy as complementary rather than opposing forces. 

Customers set reasonable expectations for what they can spend and select the option that provides the best value for them. At the end of the day, it’s not really a choice between brand and price, but a nuanced deliberation of finding the best traveling experience. 

What hotels can do is to craft a pricing strategy that matches their guest segment’s parameters and then build up a reputable brand that will get them to book rooms. The more attractive your service looks, the better your chances of increasing your occupancy rate. 

Take it one step further and invest in a hotel revenue management system like ZEN Revenue Management Software. This can help hoteliers find the most competitive room rates within their segment.

By having an automated system take care of computing room rates, hotel executives can focus on creating marketing plans that highlight a hotel’s best qualities and work on building better customer relationships. 


Want to create a stronger hotel brand and more competitive rates? Consult today with a ZEN Hospitality Solutions expert. We’ll help you increase occupancy and maximize your revenue with the best hotel management systems. Talk to an expert today. 


Article by Ayna Gonzales



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