Should We Raise Our Prices?
in Hotels & Hospitality

The short answer

The question is never "should we raise prices" in general. It is which rate segments or room types, by how much, and what occupancy or RevPAR impact you expect. The version of this question that applies to independent hotels is not the generic one. £11.4 m capex need against £2.3 m annual free cash flow with fixed costs at £41.2 m — so an answer that ignores £124.75 will be confidently wrong. The analysis has to start from 67.8 % and 25.0 % rather than from revenue.

ADR is the fastest lever in any hotel — it requires no new rooms, no additional staff and no capital projects, and it appears on the next guest folio. It is also the one operators are most reluctant to touch, which is why low ADR relative to value delivered is far more common than the reverse when fixed costs sit at £41.2 m against £72.4 m revenue.

A useful rate analysis does not produce one ADR target. It produces a segmentation: which booking channels or guest types are paying below the value they receive, which are already at the ceiling for the property, and where the discount distribution shows rates being set by the reservations conversation rather than by policy.

The uncomfortable part is that a good rate change deliberately loses some bookings. If a rise in ADR costs you no occupancy, it was too small.

How to tell this is actually your problem

These three together are the signature. One on its own usually points somewhere else.

✓ Almost every rate quote converts without pushback
✓ Rate discounts appear frequently and without consistent policy
✓ ADR has not moved while fixed costs have remained at £41.2 m

The move that usually makes it worse. A uniform percentage rise across the whole rate structure, which overcharges the price-sensitive guests and still undercharges the ones who were never buying on price.

Who this is for — and who it is not

It is for you if you run or finance an independent hotel and almost every deal closes, and closes quickly. It is the situation where the numbers are available but nobody has put them in an order that produces a decision.

It is not for you if Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.

Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.

What this looks like when the analysis is actually run

Below is an excerpt from a real run of this analysis on an independent hotel. It is a sample profile rather than a customer, and it is unedited engine output — this is the format you get, on your own numbers.

The subject is Aldermere Hospitality Group, a sample company profile used for testing rather than a customer — £72.4 m total revenue from 1,980 rooms.

This is one move out of a full analysis. Read a complete report — every page, no email required.

What the engine does with this question

This question routes to Pricing & Revenue Optimization, one of 29 engagements the platform runs. For independent hotels it works through £124.75, 67.8 %, 25.0 % and £18.1 m, then produces the sequence rather than a list of options — which move first, what it funds, and the observation that would say the sequence is wrong.

You watch the analysis get built before paying anything. Read a complete report here if you would rather see the depth first.

Questions people ask about this

How much can I raise prices without losing customers?

There is no general answer, and the useful analysis is per segment. What can be said is that the loss you fear is usually concentrated in a group whose economics you would improve by losing them.

Should I raise prices for existing customers or only new ones?

New first is safer and slower; existing is where the money is. A defensible sequence is to move new-customer pricing, watch win rate for a quarter, then bring existing customers up at renewal with notice.

What if my competitors are cheaper?

Then you are selling against them on something other than price, or you are not — and that is the real question. Competing on price without the cost structure to support it is the most reliable way to lose money at increasing volume.

Is this different in hotels & hospitality than in other industries?

Materially, yes. £11.4 m capex need against £2.3 m annual free cash flow with fixed costs at £41.2 m — which changes both the diagnosis and the order of the fixes. The metrics that decide it here are £124.75, 67.8 %, 25.0 %, and an answer built on industry-general benchmarks will usually point at the wrong one first.

What data do I need before this analysis is worth running for an independent hotel?

Less than most people expect. Your last twelve months of revenue and cost split the way you already split it, plus whatever you hold on £124.75 and 67.8 %. The analysis is explicit about what it is assuming where your data stops, which is more useful than waiting for numbers you may never have.

When is Percision the wrong tool?

Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.

Does Percision replace a lawyer, tax advisor, auditor, or AI implementation team?

Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.