Some things are extremely cheap and some are ridiculously expensive. It did not make sense and it looked as if the pricing was organised by someone with a mental age of five. My parrot could have done a better job. I then proceeded to investigate this in extreme detail. Well to be honest, I spent a few minutes. What I calculated was astonishing.
There was a kids club which was free for all children aged 4 to 12. This is not just a place where they put a few colouring pencils and ask the kids to make some paper planes. There was serious playground, guided tours, movie nights and discos. All for free.
It gets better. Staff would look after my kids so my wife and I could have some morning and afternoon fun without worrying about them.
But then we saw there was some t-shirt painting in other part of the resort and we thought this would be fun for the kids. The price? $45 for a cheap tshirt that would take them about 10 minutes to stencil. We said some pleasantries, looked very interested and then moved along. Two kids meant $90! No way. And I wasn’t the only one. At the end of the day I asked the lady how many painted t-shirts were sold. Surprise surprise less than 10. And our resort was full of kids.
Very quickly I worked out that what they should be doing is charging a small fee for the kids club – even a minor fee like $5 per child for each session ($10 for the day) and reduce the prices for the painted tshirts to say $15. I would have happily paid $10 for each child to be looked after all day and I would have been happy to pay $30 for the tshirts. That would have got the resort $50. Multiply this over a few hundred rooms and the figures start getting a bit big. Instead they got $NIL. Even my 6 year old boy knows this is not good.
So heres the thing. If your prices are all wrong all you could end up doing is upsetting your customers or at best restict them into spending money with you. Which is exactly the opposite of what you want them to do. Many we spoke to loved the kids club and some other parts but thought some things were just outrageous and started to ration their spending. Make everything reasonable and all of a sudden the cash could be pouring in.
So go back and look at your pricing – is it cash trickle which if changed could flow to a load of cash?