Setting the right price for holiday packages can make or break your hotel’s revenue strategy.
Hotels need a data-driven approach to package pricing that maximizes both occupancy and profitability.
This quick guide covers proven pricing tactics for creating attractive holiday deals that boost your bottom line.
Package Pricing Fundamentals
The base room rate should account for 60-70% of the total package value.
- Review competitor package rates in your market
- Calculate your break-even point including all costs
- Factor in seasonal demand fluctuations
- Consider your target profit margin (typically 25-35%)
Value-Add Components
Include amenities with high perceived value but lower actual cost:
- Welcome drinks or champagne ($5-10 cost, $20-30 perceived value)
- Breakfast buffet ($12-15 cost per person)
- Airport transfers ($30-50 cost depending on location)
- Spa credits ($25-50 promotional value)
- Late checkout (minimal cost impact)
Seasonal Pricing Strategy
| Season | Package Markup | Discount Range |
|---|---|---|
| Peak | 35-45% | 0-10% |
| Shoulder | 25-35% | 10-20% |
| Off-peak | 15-25% | 20-30% |
Distribution Channel Pricing
Adjust package rates based on commission structures:
- Direct bookings: Base rate
- OTA packages: Add 15-20% to cover commissions
- Travel agent bookings: Add 10-12% for standard commission
- Wholesale: Factor in 20-25% margin requirements
Package Testing & Optimization
Test new packages in low-risk periods before peak seasons.
- Monitor booking pace weekly
- Track package conversion rates
- Collect guest feedback through surveys
- Analyze revenue per available room (RevPAR) impact
- Compare actual vs. projected profit margins
Pricing Tools & Resources
Use these tools to refine your package pricing:
- STR Reports – Competitive market data
- Triptease – Price comparison platform
- Duetto – Revenue management software
- IDeaS – Pricing optimization tools
Making Packages Work For Your Property
Regular monitoring and adjustments ensure your holiday packages remain profitable.
Contact your local hotel association or revenue management consultant for personalized pricing guidance.
Remember that successful package pricing balances guest value perception with actual operational costs.
Package Promotion Strategies
Strategic promotion timing maximizes package visibility and conversions:
- Launch holiday packages 3-4 months in advance
- Create urgency with limited-time offers
- Use email marketing for early-bird specials
- Leverage social media for last-minute deals
- Partner with local attractions for cross-promotion
Risk Management & Cancellation Policies
Protect revenue while maintaining flexibility:
- Implement staged deposit requirements
- Set clear cancellation deadlines
- Offer travel insurance options
- Consider flexible rebooking policies
- Document all terms and conditions
Package Performance Metrics
Key Performance Indicators
- Package contribution to total revenue
- Average booking lead time
- Cost per acquisition
- Guest satisfaction scores
- Return on marketing investment
Maximizing Holiday Package Success
Fine-tune your package pricing strategy by:
- Regularly analyzing market conditions
- Maintaining competitive positioning
- Adapting to changing guest preferences
- Building strong vendor relationships
- Investing in revenue management tools
FAQs
- How do I determine the optimal price point for my holiday packages?
Calculate your base costs (accommodation, services, amenities), research competitor pricing, consider seasonal demand fluctuations, and add a profit margin of 25-40% depending on market conditions. - What factors should I consider when pricing holiday packages during peak seasons?
Consider historical occupancy rates, local events, competitor pricing, booking patterns, and increased operational costs. Typically, peak season rates can be 30-100% higher than off-peak rates. - How can I implement dynamic pricing for holiday packages?
Use revenue management software to analyze real-time market data, booking patterns, and demand forecasts. Adjust rates based on occupancy levels, lead time, and market conditions. - What should be included in a standard holiday package to maximize profitability?
Include accommodation, breakfast, basic amenities, and one or two popular local activities. Additional services should be offered as upgrades to increase revenue potential. - How often should I review and adjust package prices?
Review prices at least monthly, with more frequent adjustments during peak seasons. Monitor competitor rates, market demand, and booking trends weekly to stay competitive. - What is the ideal length for holiday packages to maximize revenue?
Offer 3-4 night packages as standard, with options for extended stays. This duration typically provides the best balance between operational efficiency and profit maximization. - How can I create value-added packages without reducing profit margins?
Partner with local attractions and service providers to secure bulk discounts, include high-margin services, and focus on experiences that have low operational costs but high perceived value. - Should I offer early bird discounts for holiday packages?
Yes, offer early bird discounts 3-6 months in advance, typically 10-15% off, to secure advanced bookings and improve cash flow while maintaining profitable margins. - What cancellation policies maximize profitability while remaining customer-friendly?
Implement tiered cancellation fees: full refund 30+ days prior, 75% refund 15-29 days prior, 50% refund 7-14 days prior, and no refund within 7 days of arrival. - How do I price packages for different market segments?
Segment packages into luxury, standard, and budget categories with respective profit margins of 40-50%, 30-35%, and 20-25%. Adjust inclusions and service levels accordingly.
