Room Rates

Finalizing the room rate is very important as your room rates will establish the 1st impression of your guest house. But the most frequently asked question is:
"What is the correct criteria to setup the room rates?“
Well there is a formula for which, first you need to collect some figures:

  • What is the rent of furnished apartment or a room in your locality?
  • What is the net selling price of your competitor?

Lets take an example. In an area where the cost of a furnished apartment is for INR 45,000 per month (1,500 per day) and the per day selling price of your competitor is INR 2,500. So, as per these figures you:

1. Can't sell your room below 1,500.
2. Can't sell your room above 2,500.

Thus your selling rate should be a mid average of 1,500 and 2,500 which will be INR 2,000. If your costing is above1,500, it means that you are spending to much on room amenities or services and hence you should reduce those extra services to bring down the cost.

So the formula is:

“The average of per day cost of a furnished apartment, and per day selling rate of your competitor, in your location"