Almost all hotel managers, when they find themselves having to draw up their own pricing strategy, come across the enigmatic definition of rates and prices for children.
For hotels that mainly work with families and small groups, it is essential to be able to outline a sales strategy for children’s accommodation in a flexible and accurate way.
The question we will try to answer in this article is:
What are the main pricing strategies for children and how can I configure my management system in order to simplify work and maximize sales?
Tariff policies for children: each type of hotel has its own strategy
As mentioned in the introduction, for some types of structures an accurate and meticulous definition of prices for children can be a source of revenue that should not be underestimated, while for other types of hotels the incidence of younger guests can be seen as a voice of negligible budget.
This is because different types of hotels have different customer segments which can be for example:
- business;
- pairs;
- groups and groups;
- families;
- single.
For this reason we can imagine different ways of managing prices for children.
CASE 1 – The structure mainly for business and couples: “the child always pays like an adult”
The manager of the hotel whose main clientele does not have children, will probably choose a simple configuration, 2 age groups will be defined: one for newborns (generally 0-3 years) and one for children.
Children are not entitled to a discount and pay the same price as adults, while infants are always free.
This is a very simple strategy that does not encourage stays of families or groups with children.
CASE 2 – The mixed structure with a specific type of “family” room
In this second case, we consider a hotel that has available a type of room (or apartment) particularly suitable for families with children and thus chooses to apply a different price policy for children only for that type of room.
So the hotelier may want to choose different prices for children based on the type of accommodation: the “family” room will have a price list for children that varies according to the time of year or the number of children staying (incremental discount per growing up of the children of the reservation), while for the other types a different children policy is applied, sometimes even the same as that described in case 1.
CASE 3 – The structure mainly with “family” customers
The latter case is the most complex because the variables to be taken into consideration when creating a “children’s price list” are manifold.
First of all is the seasonality of the structure, in all likelihood a structure that has “family” customers has a well-defined season cycle, for this reason it is important to be able to make sure that prices follow the cycles of the seasons in the same way as adult prices vary in certain periods.
How to flexibly manage price selling strategies for children
The first step in configuring children’s prices is to define the different age groups of the children.
For example, a hotel can have 3 age groups:
- Infants from 0 to 1 year;
- Children from 2 to 6 years old;
- Children from 7 to 13 years old.
Indicating accurately the different age groups allows you to segment the price even more scrupulously, so as to better define the sales strategy.
What are the strategies for defining children’s prices?
The ways in which prices for children can be defined are mainly 3:
1.A fixed price regardless of the prices set for the adult;
2.A percentage discount on the price that the adult would have paid;
3.A fixed discount always compared to the price per adult.
In some situations there may be a need for the child’s price to be calculated starting from a reference price (that of the adult), while in other cases it is not.
For this reason it is important that your hotel management software allows you to set prices both in an absolute (fixed) and in a relative (variable) manner.
Obviously the prices vary according to the rate for which you intend to book. For this reason it is essential to use a management system that allows you to set the price per child that is different based on the rates they are going to offer.
For example a child in Bed and Breakfast treatment can pay X € per night instead of X € + 30 € in the case of half board; therefore having a management system that allows you to set the derivation rule for the half-board price greatly simplifies the management of the structure without having to manually update the prices.
In addition to the flexibility with which a price per child is defined, these must be able to be applicable based on the time interval, in fact seasonal structures often decide to define different prices based on the period.
Let’s take a practical example
Management of child prices for a hotel on the Adriatic coast
Let’s analyze a hotel located on the Romagna Riviera, 60 rooms, the majority of which are family rooms with a capacity of 5 beds.
The hotel offers 3 different treatments:
- bed and breakfast;
- half board;
- full board.
Being a hotel on the Romagna Riviera a few steps from the sea, it is a purely seasonal structure and during the summer it divides its price lists into 5 different BARS.
A hotel with these characteristics tends to need a management software that allows you to create different BARs and apply them more or less dynamically on the summer months with the possibility of changing them quickly and updating the online distribution portals (OTA) just as quickly. .
In addition to this our hotel will need to define prices per child that are very accurate, therefore:
- will set 3 age groups (infants 0 – 2 | children 3 – 9 | children 10 – 14);
- will apply a fixed price to each type of child based on the treatment (for example a child 3-9 years will pay a supplement of € 15 per night if in B&B rate, while a supplement of € 35 in the case of half board)
- will define a discount for the second and third children in the same booking;
- will ensure that children’s prices follow the trend of adult price BARs (therefore they may also vary day by day).
In order to set rates and child prices with such a high level of granularity and make sure that these prices are not only available on the management and OTA portals, but also on their booking engine, it is important that the hotelier is equipped with a PMS ( Adequate Property Management System).
Examples of price flexibility for children
Let’s show some examples of flexibility that a valid hotel management must offer when defining prices for children (obviously only some of the following settings match your sales strategy).
1) The management system must give the possibility of not defining prices per child, i.e. making sure that they pay the same price as the adult.
2) It must be possible to specify whether to consider the child as an occupant of the room or not (very useful functionality in the case of babies sleeping in the parents’ bed).
3) It must give the possibility to present the adult price until reaching the nominal room capacity: this is fundamental if you want 1 adult and 1 child in a double room to pay the price of 2 adults, while if in the same room room stay 2 adults and 1 child then the latter will pay the child price (precisely because the nominal room capacity of 2 has been reached).
4) It must offer the opportunity to apply different discounts based on the treatment offered in the various accommodations: for example being able to set a percentage discount for the half board treatment sold in my double room and a fixed discount for the overnight stay treatment sold in my room matrimonial.
5) You must put in a position to apply different discounts according to the age of the children in the booking. For example infants from 0 to 2 years 20% discount, children from 3 to 9 years 10% discount.
6) It must allow you to set different discounts according to the number of children present in the reservations. For example in a reservation of 2 adults and 1 child, the latter will have a 10% discount, while in a reservation of 2 adults and 2 children, it will be possible to apply a different discount for the second child, for example 20% .
Management of rates and prices for children with Slope
Slope allows you to define the setting of children’s prices in an absolutely flexible way, thanks to an intuitive interface that allows you to manage discounts, rates and conditions of sale even more simply.
What are you waiting for to request a trial demo of Slope, hotel management software?
