What is the purpose of Premium room pricing?

The purpose of premium room pricing is primarily to create advantages in pricing decisions by identifying revenue opportunities for premium rooms. This strategy focuses on maximizing revenue from higher-end offerings within a hotel, which can include larger rooms, better amenities, or exclusive services. By segmenting the market and pricing premium rooms accordingly, hotels can capture the greater willingness to pay from guests seeking luxury or enhanced experiences, thus optimizing overall profitability.

Identifying such revenue opportunities helps hotels not only to differentiate their offerings but also to strategically position themselves in a competitive market. Premium room pricing allows hotels to leverage demand from affluent travelers or those willing to spend more for added comfort, which can lead to increased overall revenue, even if it does not directly lower the prices of other types of rooms.