Guest-first pricing means knowing your comps, adjusting weekly, and not clinging to launch rates. Small property owners often skip the basics—here's how to stop leaving money on the table.
By Siti Noraini, Head of Marketing at HomeAway
When's the last time you reviewed your room rates? If it's been over a week — or worse, over a month — you're almost certainly leaving money on the table.
Competition in hospitality is fierce. Hotels, guesthouses, and short-term rentals are all fighting for the same guests. But if you nail a few fundamentals, you won't fall behind. Here are the most common pricing mistakes small property owners make — and how to avoid them.
1) Pricing too high at launch
You invested heavily in your property. You want returns fast. Fair. But travelers rely heavily on word-of-mouth and reviews when booking. If your property is brand new or just listed on a new platform, you haven't earned their trust yet.
Start by pricing slightly below market rate to drive early bookings and build up your review base. Once you've got a solid track record, then raise your rates to competitive levels.
2) Leaving rates unchanged for too long
Fully booked for the next few months? Great — but are you actually maximizing revenue?
A full calendar doesn't always mean you're optimized. It might be a red flag that you're underpriced. If demand is that strong, you probably have room to raise rates.
Also: differentiate your pricing. Weekdays vs. weekends. High season vs. low season. Hotels do this for a reason.
3) Ignoring what competitors are doing
In any business, understanding your market and your competition is non-negotiable. Look at similar properties in your area. What are they charging? Why are they raising or lowering rates? What's the local benchmark?
Studying competitor pricing gives you a feel for when demand spikes — and how to position your property to capture it. And remember: guests don't just compare apples to apples (hotel to hotel, pension to pension). They compare based on amenities, location, and value.
Take a hard look at what successful properties in your area offer — and how they present it.
4) Not using dynamic pricing tools
Most platforms let you customize rates with last-minute deals, weekly discounts, or off-season promotions. These tools can tip the scales in your favor — especially when you're competing against bigger operators.
Use last-minute pricing to fill empty rooms. Offer weekly or monthly packages. Run targeted off-season deals.
Remember: hospitality inventory is perishable. A room unsold on December 1, 2017 can never be sold again. You can't rewind time.
5) Ignoring travel trends, local events, and seasonality
Demand fluctuates by location, property type, and time of year. Keeping your rates static year-round is leaving revenue on the table. In Korea, July–September and December–January are typically peak seasons. If you're near Pyeongchang, the upcoming Olympics will be a major surge event. Music festivals, sports tournaments, and conferences can triple normal demand overnight.
But don't just raise prices during peaks. Lower them during the off-season to fill rooms instead of leaving them empty.
That said: don't overprice, even during high season. Extreme rate hikes can backfire. The goal is to price effectively for maximum bookings and profit.