How Smart Markup Strategies can help you boost profits- exclusively for Travel-Hospitality & Luxury Industry
Earning profit from your business involves a blend of the right decisions and available resources and opportunities. As with anyone in the hospitality sector, you must also have strategies and goals to earn big revenue.
As a travel industry business, you buy content from suppliers and offer it to customers and agents to select from. Usually, every trip is searched across several websites before being booked.
If your agents find the prices appealing enough, your look-to-book ratio will be higher. This is where a smart markup policy enters and keeps you in check over your margins. It helps you check your extended smart pricing for your customers and agents. Here are some smart markup strategies to help you boost your travel and hospitality profits.
But, first, let’s understand what a markup pricing strategy is.
It is about setting the prices of your hotel rooms, tour packages, and activities high enough to make a good profit on every sale. Recognize all costs linked with running the business and then mark your profit. From fixed expenses to variable costs, everything should be added.
Why is markup pricing beneficial for the travel and hospitality sector?
1. Tackle profits: After you set a pricing model, you can add a markup to enhance your profits. Your markup price is the extra sum added to your pricing to help you earn higher revenue with every transaction.
2. Reasonable pricing: Using a good markup strategy will help you sell your products and services at reasonable prices and maximize your sales.
Markup strategies for the hospitality and travel industry
Markups are best used to protect a business and enhance revenue. They play a vital role in the travel and hospitality sector. Forming a strong inventory or supply from the producers, contractors, or suppliers and adding a markup price to it can help you improve your revenue stream to a great extent.
Here are some strategies to boost profits:
1. Be easily available for online booking
These days’ customers love convenience, flexibility, and ease of booking online. You will easily notice uplift by offering them a good app with good features and providing a good chatbot to handle all their queries. When customers get the comfort and convenience of your travel technology solutions, they are ready to pay a markup price.
2. Choose a revenue-based culture
Who all are included in your revenue team??? Everyone… from employee to anticipated services to desired amenities and personalized services with higher customer experience!
Well, if you offer these services, you can make your customers emotionally connect with you and get their loyalty leading to higher revenue returns.
3. Upsell all your products
Revenue opportunities include more than just selling flight tickets and hotel rooms. Think about the on-site amenities and what can be charged. Go ahead by offering hotel guests a chance to buy soap, bathrobes, and other amenities such as Jacuzzi, pool, or fitness club. You can offer them an elite menu or additional legroom seats for flights. Selling unique products within your establishment is a good markup strategy to boost profits.
4. Use local events and attractions
Events and attractions work as a perfect strategy to boost profits. They are a good opportunity to curate guest packages and offer exclusive services such as personalized food, transportation, and lounge services. The advantages are two-fold. It makes the guests enjoy themselves more, and the hotel generates higher income. Once you choose precisely developed strategies for your revenue and sales, you should understand your KPIs (Key Performance Indicators) first. After you know what you need to look at, you can assess the data and develop ways to change them to work in your favor.
With Softifytec you can calculate and add your markup strategies to boost profits. You can markup or discount flight tickets or rooms with Softifytec services. You can also define fees for re-issue, cancellation, or issue. Softify offers effective travel management solutions to ensure effective travel management services. It helps to adapt a dynamic business model and enhance the traveler experience.
1. What is a markup pricing model?
Markup is the difference between the actual cost and the selling price of the product. You can assess the markup by deducting the unit cost from the selling price and dividing the result by the number of units.
2. How is markup helpful in a business?
The amount of markup determines the money he makes by selling a product. The more the markup, the greater the price of the product, and the higher the money the retailer makes.
3. How to enhance your markup?
- Increase the selling price of your product
- Enhance your average order value
- Optimize your operations and lower the operating expenditure
- Promote your brand and increase your perceived value
- Adopt savvier purchase processes