A price floor should reflect what an additional booking costs and what the property is trying to achieve. It is a decision aid, not a guarantee of profit.
A practical approach
- List variable costs per stay and per occupied night.
- Allow for channel charges and included services.
- Review the floor whenever stay length or service scope changes.
An example to consider
A two-night stay spreads one cleaning charge over fewer nights than a seven-night stay. The same nightly floor may therefore be unsuitable for both.
What to track
Record contribution after variable costs and monitor total monthly operating results separately.
Part of the Marbella Hospitality practical-note collection. About this collection.