This famous quote from Conrad Hilton recently piqued my interest, “If you are 100% occupied, you are not charging enough rent.”
I hear from many operators that its often easier to maintain their inventory at 100% occupancy because it requires less of a selling expense. Have you asked yourself if it’s time to raise your rates? What is your strategy to increasing those rates without losing valuable long-term customers? An article from Harvard Business Review on Pricing suggests that pricing decision makers only make decisions based on current costs and competitors’ rates. The Article suggests management needs to consider competitors pricing moves both in the short term and long term.
Check out this Graph from one of OAAA’s recent webinars. It clearly shows OOH’s position in comparison to its competitors. Print, Radio, and Local TV will be trying desperately to either hold or reduce their rates just to keep advertisers coming back. This is the perfect time for OOH operators to increase their rates. Consider this article on Inflation from the Associated Press, it suggests that as the economy reopens, demand will soar. Prices will sharply inflate but as demand readjusts, pricing increases will eventually slow resulting in higher overall prices from when the process began. I would love to get your opinion, is now a good time for you to consider increasing your rates?