--- title: "Room Pricing Guide for Hoteliers" description: "Pricing rooms is one of the toughest decisions accommodation operators face. It's entirely up to you — which is why we've put together this guide to help you find your floor." published: 2024-04-02T00:00:00+00:00 author: "ONDA 편집팀" category: "Weekly ON" image: "https://zqcfqfqgiyckyhazcfrk.supabase.co/storage/v1/object/public/blog-images/webflow/6316f3f75130788ec2d762dd/660b6f24df5cce8a0e0d2018_WeeklyON_vol117_webflow_cover_1200px.png" canonical: https://global.onda.me/en/blog?slug=vol-117 locale: en --- # Room Pricing Guide for Hoteliers Hi there — this is Weekly ON, your hospitality newsletter. Pricing rooms is one of the toughest decisions accommodation operators face. Unlike running a franchise or a convenience store where prices are set for you, room rates are entirely up to you. That's why today we're breaking down a framework for setting your rates. ⚠️ All rights reserved. Cite this piece as 'ONDA (온다)' when quoting. --- #### **In this issue** 🏨 How should you price your rooms? 📬 Newsletter & PR Workshop (1st edition) 💡 2023 Jeju travel trends: domestic vs. international visitors ⌨️ #Feb_inbound_tourism #travel_spending_decline #boutique_hotels #foreign_guest_share #lifestyle_accommodation_reporting --- **🏨 Industry Talk** ### **How should you** ### **price your rooms?** Pricing rooms is one of the hardest parts of running a property. If you own a franchise restaurant or a convenience store, you sell products at fixed prices. With accommodation, the rate is entirely on you. So here's a minimum viable framework for setting your room prices. For small to mid-size properties (like guesthouses and pensions), pricing usually comes down to three factors: 1️⃣ The most common method: check what **similar properties nearby are charging** on booking platforms, then price competitively within that range. 2️⃣ **Calculate your cost basis** and work backward. This includes all upfront costs (construction, interior, permits, etc.), labor, and operating expenses (utilities, taxes, etc.). A typical goal for pension operators is to break even within 24 months. Divide your total cost by 24 to get your monthly nut, then reverse-engineer the minimum nightly rate you need to hit that target. **We strongly recommend establishing a floor — a rate below which you will not go — before you start operations.** 3️⃣ **Identify your premium drivers.** Great location is usually the biggest lever. Add differentiated amenities (BBQ, pool, spa/jacuzzi, high-end toiletries) and layer in the premium guests are willing to pay. But there's one more critical variable: **seasonality.** You need to adjust for peak vs. off-peak. While the gap has narrowed in recent years, peak season still makes or breaks your year. **So how big is the spread between high and low season?** ![](https://zqcfqfqgiyckyhazcfrk.supabase.co/storage/v1/object/public/blog-images/webflow/6316f3f75130788ec2d762dd/65fa6bc0ea8e4c80c93e52ab_3.jpg) The chart above shows monthly average prices for pensions booked through ONDA in 2023. **August saw the highest rates, March the lowest.** So what's the actual dollar difference between peak and off-peak? And how should you price for each? ### [👉<**How should you price your rooms?**\>](https://www.onda.me/trend/uri-gaegsil-gagyeogeun-eoddeohge-gyeoljeonghaeya-halgga) --- **📬 ONDA News** ![](https://zqcfqfqgiyckyhazcfrk.supabase.co/storage/v1/object/public/blog-images/webflow/6316f3f75130788ec2d762dd/65f8e22ca2e8590c7bc25816_x_1-1.png) ### [👉](https://forms.gle/JCkPfxh8FnAkX3re6) --- **💡 Hospitality Trends** ### **Jeju 2023:** ### **Domestic vs. international travelers** According to the [2023 Jeju Visitor Survey](https://ijto.or.kr/korean/Bd/view.php?btable=pds&bno=443) by Jeju Tourism Organization, domestic travelers spent an average of ₩665,843 per person in 2023 — a slight increase from ₩661,371 in 2022. But **accommodation spending dropped sharply: from ₩155,369 in 2022 to ₩127,171 in 2023.** The shift likely reflects post-pandemic travel demand spreading back to international destinations. Hotels accounted for 60.2% of stays, followed by condos/resorts (17.2%), pensions (14.4%), and guesthouses/hostels (3.9%). Compared to pre-COVID, **hotel share rose while pensions and condos shrank.** What about international visitors? Foreign tourists spent an average of ₩1.4M per trip in 2023 — down ₩200K from 2019. Accommodation ranked third in spending, after flights and shopping. Hotels dominated at 81.3%. **Japanese and Chinese guests overwhelmingly chose hotels**, while **Southeast Asian and North American travelers used hotels but also stayed at guesthouses and pensions at relatively higher rates.** Full report below! ### [👉<**Full story**\>](https://www.sukbakmagazine.com/news/articleView.html?idxno=60166) --- **⌨️ Keyword News** 1️⃣ **February inbound tourism** [👉\[Full story\]](https://www.traveltimes.co.kr/news/articleView.html?idxno=408047) **TL;DR:** February inbound tourism up sharply, led by Chinese visitors **The story:** Inbound arrivals hit 1.03 million in February — up 115% YoY and 17% MoM. Chinese visitors exceeded 340K, showing the clearest recovery trend. **What about outbound?** Koreans traveling abroad topped 2 million for the eighth consecutive month. February saw ~2.5M outbound travelers, reaching 96% of pre-pandemic levels. 2️⃣ **Travel spending contraction** [👉\[Full story\]](https://news.heraldcorp.com/view.php?ud=20240327050087) **TL;DR:** Domestic travel spending down from pre-COVID levels **The story:** Domestic travel spending climbed post-pandemic but has declined since 2022. Adjusted for inflation, real spending is now below pre-COVID. **The numbers?** In February 2024, average spending per person per day was ₩74K — a sharp drop from the ₩90K peak in June 2022. 3️⃣ **Boutique hotels** [👉\[Full story\]](https://www.hankyung.com/article/2024032841151) **TL;DR:** Major hotel brands racing to expand boutique (business) hotel portfolios **The story:** Leading Korean hotel groups are competing to open boutique hotels. Brands like L7 and Shilla Stay are gaining traction, attracting third-party management contracts. **Why?** Boutique hotels require less upfront capital than luxury properties while delivering stable returns. Haeundae Beach Hotel, Hanwha Hotels & Resorts, and others are planning boutique rollouts. 4️⃣ **Foreign guest share at hotels** [👉\[Full story\]](https://www.news1.kr/articles/5367843) **TL;DR:** Foreign guests now make up 80% of bookings at major Korean hotels **The story:** Major hotels saw March occupancy rates rise more than 10 percentage points YoY, driven by international guests approaching 80% of total bookings. **Why?** Special events like the MLB World Tour and Asia's 50 Best Restaurants Awards boosted foreign bookings starting in March. 5️⃣ **Lifestyle accommodation reporting** [👉\[Full story\]](https://www.news1.kr/articles/5365171) **TL;DR:** Ministry urging lifestyle accommodation operators to register as lodging businesses **The story:** The Ministry of Land, Infrastructure and Transport told local governments to check registration status for lifestyle accommodations and encourage compliance. A grace period runs through year-end, with enforcement penalties suspended. **What's next?** The ministry says no further extensions. Owner groups are lobbying for semi-residential classification, but the government plans to impose penalties once the grace period ends. ---