Rate resistance, so now what? (Part 2)
By Bonnie Buckhiester | hotelnewsnow.com
This is the second installment in a two-part column about price wars and rate resistance. Read “Winning the price war (Part 1).” OK … let’s say you’ve tested for rate resistance, and it’s there. And you’ve had success with adding value and well-fenced promotional specials. But you’re running out of options. Now what? At this point, you believe you have no choice but to start fighting the price war head on. But before jumping into this bottomless pit of lost profitability, conduct a break-even analysis, which is a calculation of how much incremental revenue and roomnights you’ll have to generate for the price reduction to be beneficial.