Black Friday and Cyber Monday have been established as top selling days in the hotel industry, too. However, there are risks involved: those who offer discounts on room rates without careful consideration risk damaging their price image in the long term and may end up operating at a loss. The key question is: how can you strategically leverage the peak promotional period without sacrificing profit?
The big risk: RevPAR cannibalization
A simple discount on the base rate may increase occupancy in the short term, but can undermine the average daily rate (ADR) in the long term. Guests get used to low prices and strategically align their booking behavior with such predictable discount campaigns. If promotions are offered for periods of high occupancy, potentially high-margin bookings may be blocked at rock-bottom prices. Even more drastic: dumping prices lead to destabilization of the entire market, as competitors are drawn into an unnecessary price war and consumers' perception of prices permanently suffers. The solution is to control demand strategically.
1. Strategy: Timing deals based on the right data (the AI solution)
The key is to only place deals where there are existing gaps in the forecast. This requires accurate forecasting, which often exceeds manual calculations.
- The AI advantage: Modern RMS systems such as Hotellistat use real-time data and historical patterns to identify exactly which days of the week, weeks, or seasons (off-peak periods) generate low revenue.
- Campaign goal: The Black Friday promotion is specifically timed to coincide with these low periods, thereby increasing occupancy where it is really needed. Guests benefit, but the hotel only fills the predicted gaps.
2. Strategy: Increase value: Manage length of stay (LOS)
Instead of lowering the price, the value of the stay should be increased. Controlling length of stay (LOS) is a common and effective tool in revenue management. Black Friday deals are great for using this technique to extend length of stay and increase profitability per stay: Offer promotions that require a minimum length of stay (LOS) which is longer than the statistical length of stay of your guests. This reduces transaction costs per stay and stabilizes occupancy over a longer period of time Important: Only apply LOS rules specifically to weak dates so as to maintain flexibility for high-demand days. Example: “Book 3 nights, pay for 2” - in this case, the rate is not reduced, but an additional product (the third night) is used as an incentive.
3. Strategy: Shift profits: Utilize dynamic ancillary revenue
The focus should be on additional revenue in order to keep room rates stable and shift the added value of the deal to high-margin services. Utilize the incentive to sell high-margin additional services.Example: Instead of offering 20% off the room rate, offer 10% off the room rate plus a free spa voucher or F&B credit. This shifts the perceived value of the deal to ancillary revenue, which is later rewarded with additional spending in the hotel.
4. Strategy: Control across all sales channels
The strategically defined Black Friday deals must be rolled out consistently and in a timely manner across all channels.
- Boost direct bookings: Take advantage of the hype to reward direct bookings with exclusive packages (e.g., early access or better ancillary services). For example, create search engine campaigns that promote such special deals.
- Channel automation: An all-in-one system ensures that complex LOS rules and promotion rates are transmitted accurately and in real time to all OTAs, GDSs, and the hotel website.
The conclusion
Black Friday doesn't have to be a discount battle. With a data-driven strategy that shifts the focus from the room rate alone to the length of stay, additional services, and filling gaps, hoteliers can maximize their profits. The basis for this is an intelligent RMS that not only manages discounts but can also accurately predict strategic gap filling.
