Why do hotels cut prices one week before the festival?

The reasons for the hotel's price reduction one week before the festival are as follows:

1. Reduced demand: Holidays are usually the peak time for people to travel, but a week before that, some tourists may have booked hotels in advance to avoid the peak time. Therefore, the demand for hotels in the week before the festival is relatively low, which provides an opportunity for hotels to reduce prices.

2. Inventory pressure: Hotels usually reserve more houses on holidays to meet peak demand. However, if these houses are not fully booked one week before the festival, the hotel may face inventory pressure. Reducing prices can help hotels sell these houses faster and avoid overstocking after the peak period.

3. Price competition: In order to attract more tourists, there will be fierce price competition between hotels. In the week before the holiday, this competition may be more intense, because hotels hope to attract potential customers by offering more attractive prices. Lowering prices can help hotels stand out from the competition and attract more customers.

4. Forecast error: Sometimes, hotels may overestimate or underestimate the demand during holidays. If the hotel's forecast demand is low, it may be a reasonable decision to reduce the room rate one week before the festival to avoid overstock or insufficient demand.

In short, the price reduction of the hotel one week before the festival is to meet the market demand, reduce the inventory pressure, attract more customers and better predict the demand. Of course, the specific reasons may vary from hotel to market.