Okay, so we all love a good deal, right? Getting something cheaper always feels like a win. And hotels and resorts have definitely caught on to this, offering tons of discounts to get people to book. But a lot of hoteliers have gotten stuck in a loop of constantly slashing prices, offering direct channel discounts, OTA promotions, and special rate packages to drive occupancy. The problem is, this can actually hurt your brand, lower rate integrity, and compress margins.
With the advancement of tech, data analytics, and changing consumer behavior, you may not need to lean on aggressive discounts to drive performance. In fact, for if you’re a luxury brand, cutting prices might not even bring in many more bookings. So, what else can you do?
Focus on value-added offers
Well, instead of just dropping prices, you can focus on giving guests more bang for their buck. Especially for luxury and boutique hotels, people are often more interested in getting something extra than just a lower price due to the perception of greater value. Think about it: instead of 15% off, what if you got a free spa treatment, or someone picked you up from the airport, or they set up a local tour for you? That feels way more special, right? The cherry on top is that it preserves your average daily rate (ADR) while elevating the guest experience, satisfaction, and loyalty.
Prioritize direct bookings
Another thing you can do is get people to book directly with you. Instead of putting discounts everywhere, you could create loyalty programs, offer member only rates, and offer bespoke incentives. Tools like personalized email marketing, dynamic content on booking engines, and tailored digital advertising can shift focus from pure rate competitiveness to relationship-building and brand engagement. If you leverage customer data too, you can even offer deals tailored to what each guest actually likes, which means more bookings without having to apply broad, catch-all discounts.
Position your brand well
And let’s not forget about just making your hotel really awesome! If you have a strong brand, a compelling story, and something that makes you stand out from the competition, you might not need to discount at all. For luxury and niche properties, this might mean investing in high-quality content, influencer partnerships, and social media engagement to highlight these, including exclusivity and heritage.
These come together to make your property more desirable which in turn makes guests less price sensitive and more focused on being part of an experience.
Use revenue tech to your advantage
Revenue management systems (RMSs) have evolved to provide smarter segmentation and demand forecasting to tighten levels of granularity. You can use AI-driven tools to figure out exactly who might be interested in a specific offer, instead of just giving everyone the same discount. For example, targeting people looking for a local getaway during shoulder seasons or offering special deals to business travelers for repeat bookings. This approach means you can still fill rooms without slashing prices across the board.
Think TRevPAR over ADR
Shifting focus toward optimizing total revenue per available room (TRevPAR) instead of purely occupancy or ADR can unlock performance gains. Things like upselling, cross-selling ancillary services, and promoting on-site spend at restaurants, spas etc., can result in a stable revenue stream. If you’re a luxury hotel, these extras are a significant part of profitability and often provide more flexibility in tailoring the guest experience than competing on room rate alone.
Develop strategic partnerships
Finally, consider teaming up with well-known companies, local businesses, and experience providers to create co-branded packages that have a high-value perception, without needing to drop your rates. These partnerships also have the added benefit of marketing your business.
The industry needs to say goodbye to mass promotions
In conclusion, while rate parity once served as the cornerstone strategy to control over-promotion in hotels, the industry has outgrown this approach. With access to advanced technologies, data-driven marketing, and a better understanding of guest behavior, hotels—especially those in the luxury or niche segments—can focus on creating value, elevating brand desirability, and maximizing total revenue. By leaning into personalization, unique experiences, and relationship-building, you can break free from the endless cycle of discounts and achieve sustainable performance growth without sacrificing your brand positioning.
