Here is the transcript of the video:
« 👋 Hello everyone and welcome to the YouTube channel of j'annonce complet . I'm Guillaume, revenue management at j'poste complet. Today, I wanted to address a question that may arise in these somewhat difficult times linked to inflation. It is with this inflation that we perceive: should we increase these prices to compensate for inflation? So, it would be a fairly logical reflex that you could have as a manager, to impact the amount of inflation on the price of your nights.
And so, the question that we will try to answer today is why should we do it, and if so why, and if not why in the same way. So, it's true that inflation compared to 2022 has decreased a little, but it still remains at high rates. As I make this video in November and October 2023, the figures in France are still 4.2% inflation.
So, we could say to ourselves: “We’re going to compensate for that on the price of the night.” » Except that in reality, this is equivalent to doing what we call COS plus pricing . This is COS plus . This goes a bit against revenue management . Which is equivalent to setting our prices based on our costs. Except that in reality, a traveler doesn't care about our charges. What he wants is the price. If the price of your household, the price of energy has increased, we cannot say: “Well in that case, it will increase. » These are things that we can do in certain industries, but we cannot necessarily do it there. Especially since for short-term rentals , the amount of fixed costs will generally be much greater than the amount of variable costs. So, increasing your prices at the risk of not selling means ultimately saying that you won't even be able to repay the fixed costs already generated.
The ideal would still be not to necessarily impact its prices and rather to try to maintain an equivalent turnover, or even to increase, by trying to play on other aspects such as the occupancy rate or lots of other levers. But increasing the average price if demand does not increase, or the traveler's budget does not increase, would just be going a little into the wall and having less occupancy rate. So, this is not advice at all. What you need to look at is all the levers and generally in income , we look at the income per room .
So, if we keep the same average price as last year because we have not impacted this inflation on our average price, but that allows us to achieve a higher occupancy rate, well we will be better off and In the end, in the end, we will perform better. And what you have to remember is that inflation applies to you, the rental company, but it also applies to the traveler. With inflation, his purchasing power is declining. So, all the more reason not to increase prices.
Because if he has to make a choice between whether the amount is too high compared to what he planned to do, well potentially, he won't travel. And we see it more and more often in 2023 because of this inflation, we still have declines in performance, in occupancy rates. So, all the more reason not to increase prices. There you go, I hope that this little debate on inflation and whether we should apply these prices will have found it relevant to you.
And you, what do you think about it? Once again, I invite you to share your opinion in the comments. Do you tend to apply cost increases, therefore, inflation on your prices, or do you prefer not to put yourself higher than the competition and therefore stay at the price you make, even if to have to have more filling? There you go, well listen, I wish you good luck and don't hesitate to share your thoughts! »