Occupancy Based Pricing maximizes occupancy in spacious and valuable rooms by tailoring pricing to the number of guests staying in them, improving bookings and search visibility.
What is Occupancy Based Pricing (OBP)?
Occupancy Based Pricing is a powerful pricing strategy that can boost your bookings and improve your property's search engine visibility. By offering tailored pricing to the number of guests staying in each room, you can maximize occupancy in your larger and more valuable rooms, ultimately increasing your revenue. This approach can also enhance your guest experience by providing them with pricing options that suit their specific needs.
The good news is that you can now easily implement this strategy across popular booking platforms like Booking.com, Expedia, and Agoda by updating your rooms directly through the Hotel Link extranet.
Understanding Occupancy Based Pricing
Occupancy Based Pricing is a pricing strategy that enables you to set rates for the same room based on the number of guests occupying it. For instance, if you only set one rate for a quadruple room assuming that it would be occupied by four guests, you may lose out on bookings from smaller groups.
By utilizing occupancy based pricing, you can offer the same quadruple room to groups of two or three, or even to single guests, by showing them different prices.
Consider this example of a Quadruple room with and without Occupancy Based Pricing:
Without Occupancy Based Pricing:
- Room rate for 1 to 4 guests: $200
With Occupancy Based Pricing:
- Room rate for 4 guests: $200
- Room rate for 3 guests: $160
- Room rate for 2 guests: $120
- Room rate for 1 guest: $80
By implementing Occupancy Based Pricing, you can offer the same room to groups of different sizes and maximize occupancy in your property. OBP can also make larger rooms more appealing to single guests, giving them the option to pay a lower rate based on the number of guests. The rate adjustment is completely customizable to your preferences.
What are the benefits of Occupancy Based Pricing?
Booking.com states that the properties currently using OBP enjoy the following benefits:
- Appear in more search results: Rooms with OBP are visible because the room rate will match more searches.
- Increase occupancy of the more valuable rooms: Biggest and most expensive rooms can be sold to more travelers.
- Boosted revenue: Occupancy based pricing can lead to an average revenue increase of 3.5%.
Does Occupancy Based Pricing work on all OTAs?
No, currently it only works on Booking.com, Expedia, and Agoda.
For Expedia and Agoda, no update is required to apply Occupancy Based Pricing. But it may be necessary to request the OTA to change the pricing structure from "Standard Pricing" to "OBP".
For Booking.com, please contact our support team to activate the feature for your property. Only our support team can activate this feature on Booking.com. Once activated, you need to update the room mapping in the Hotel Link extranet.
Updating Occupancy Based Pricing on the extranet
With Occupancy Based Pricing, you can set different rates for the first, second, third, etc. guests in the room. When it's activated, specific rows will appear in the Rates and Availability page where the rates for each extra guest in the room can be entered.
Please note that if the rate is missing for an extra guest on any date, the system will use the rate of the first adult or child.
Occupancy Based Pricing on OTAs and Booking Engine
Depending on the number of guests, the prices for the same room type will vary and travelers will see different prices.
