Discounting is not the Way to Make More Money in Hotels—or Vacation Rentals
Discounting doesn’t work as a strategy for hotels that are trying to earn more revenue than the other hotels in their immediate competitive set.
This is the conclusion of a new study from the Cornell Center for Hospitality Research which revisited the question of whether discounting works to bring in more money, compared to direct competitors. As reported by 4Hoteliers, the study by Cornell professors Canina and Enz concludes that, “What this means is that regardless of the economic situation, the way to achieve stronger revenue than competitors is to charge more than those competitors do.�
While this is a study of hotels, it is perfectly consistent with our own philosophy of operating vacation rentals. We have always stressed in our Vacation Rentals Newsletter that the best way to compete is to offer more amenities and better value to customers and charge a premium for your superior quality. As we have often said, there will always be someone willing to rent their vacation home for a lower price than you.
