Hey there, food enthusiasts! Let’s talk about dynamic pricing and why hotels and resorts find it difficult to implement it effectively in their banquet and catering menus and also offer seasonal menus. We all know that the time of year or even as micro as the days/times of the week, or venue play a role here and that changing seasons bring a variety of ingredients that are not only more cost-effective but also add that special touch “to the season” touch. So, why aren’t we seizing these opportunities and execute dynamic pricing strategies? Let’s find out!
Speaking of profitability, the banquet and catering segment is often the most lucrative part of the food and beverage industry. By embracing dynamic pricing, hotels and resorts can tap into this profitability even further. Imagine offering “plus” pricing on weekends or during peak demand days. It’s an opportunity to maximize revenue and make the most out of high-demand periods.
One of the reasons hotels and resorts struggle with dynamic pricing is the complexity it entails. Unlike room rates, which can be easily adjusted based on demand, banquet and catering menus involve multiple variables. From the availability of seasonal ingredients which, arguably, don’t change from year to year (not subject to climate change implications!) to the fluctuating demand on different days of the week, there are many factors to consider. Juggling all these elements can be quite a task!
I remember an etseemed colleague once telling me that hsi son was looking to get married in a major U.S. city and was looking around at luxury hotels to be the host venue. He went to one globally-branded property and wqas quite a price of $165 per person. He then told the sales associate that he didin;t nee dto get married on a weekend, then asked what the price would be if he held the evnt on a Tuesday.“$165 per person” was the response.
Now we all know that labor is not variable and that becomes a fixed cost on these events, the same as housekeepers (or other) on the rooms side of the business. But why aren’t we treating the pricing like we are looking at a STR report? Fridays, Saturdays, & Sundays at, say, a “165 index” and Tuesdays at, say, 85 as far as pricing goes?
Convenience also plays a role in hindering the adoption of dynamic pricing. Quoting a fixed price throughout the year is undoubtedly easier for both customers and sales staff. However, this convenience comes at the expense of potential profitability.
Moreover, dynamic pricing allows hotels and resorts to leverage the availability of seasonal ingredients. By incorporating these ingredients into their menus, they can create unique and cost-effective culinary experiences for their Guests. This not only enhances customer satisfaction but also sets them apart from competitors.
So, how do we overcome the challenges and unlock the profit potential of dynamic pricing in banquet and catering menus? I mean, most of the restaurant ‘outlets’ in hotels lose money when all the true costs are layered in and banquets/catering can be hugely profitable. So, why aren’t we pushing this further?
It starts with a shift in mindset. Hotels and resorts need to embrace the concept of dynamic pricing and invest in the necessary tools and technologies to implement it effectively. This includes analyzing data, monitoring demand patterns, and adjusting prices accordingly.
To all the hoteliers and food and beverage professionals out there, it’s time to take action! Start exploring dynamic pricing strategies for your banquet and catering menus. Don’t let the convenience of fixed pricing hold you back from maximizing profitability. Embrace the changing seasons, leverage demand dynamics, and create unforgettable culinary experiences for your Guests.
In conclusion, dynamic pricing in banquet and catering menus is not an impossible feat. It may come with its challenges, but the potential for increased profitability is too significant to ignore. By adopting dynamic pricing strategies, hotels and resorts can tap into the ever-changing market dynamics, offer unique culinary experiences, and ultimately boost their bottom line.
So, what are you waiting for? It’s time to unlock the profit potential of dynamic pricing in your banquet and catering menus. Embrace the seasons, adapt to demand, and take your food and beverage business to new heights!
Remember, the key to success lies in taking that first step towards change. Start today and reap the rewards tomorrow.
We hope you found this blog post insightful. Share your thoughts and experiences with dynamic pricing in the comments below. Let’s continue the conversation!
