Pricing is one of the fastest levers in accommodation. When the rate is too low on even a handful of products, the shortfall accumulates every single day. Getting it right does not require a complete overhaul. It requires knowing where the gap is.
The challenge
A large regional caravan park was experiencing declining profitability year on year. The park ran at medium occupancy with a clear weekend peak and quieter weekdays. One of the key issues identified in the review was that certain products were priced below what the benchmarks supported for a business of this type and size. The park was leaving money on the table with every booking on those products.
What we did
We ran a Profit Boost Review. Two years of financials, benchmarked against relevant industry standards. The pricing gap was identified in the financial data and confirmed through a discovery process with the client, who brought their own knowledge of the market and their product range to the conversation.
The recommendations: increase pricing on the identified products, set a revenue target for those areas, and track performance through quarterly reviews over 18 months. The client had the data to know the increases were supportable, and they moved on them.
The result
- Revenue in target product areas: $56,500 additional income per year, a 9% increase
Achieved within 18 months. The occupancy did not change. The pricing did. A revenue gain with no additional cost attached to it: review it, quantify it, report it – business then implement it.
