The pool cabana pricing lesson

I noticed a pricing lesson for startups while lying by a hotel pool today.

Legs or hotdog? Note the empty $120 cabanas (the woman sitting in the rightmost cabana is an outlaw and she’s about to get ejected by the staff).

The Sofitel Broadbeach hotel is one block from the famous Gold Coast beach of the same name, with its fine white sand and warm waters. So the pool at the Sofitel has some strong competition.

But some people (who maybe don’t like sand, surf or being too far from their hotel room key) would rather lie by the pool.

The pool is free to access and so are the sun lounges, except a row of cabanas – exactly the same as the other lounges but with a tent roof and curtains. These aren’t free – they’re $120 a day.

Let’s say you stick it out six hours; that’s $20 an hour, or $10/hour for each of the two sun lounges. In Australia, in a hotel frequented mostly by young families, that’s a lot. So they’re empty.

Lie on the free lounges and the $120 you save could buy a few cocktails and a plate of fries.

But they’re empty because the price is fixed at $120. Instead of $600/day the Sofitel is earning $0.

I don’t know how they arrived at $120 but my guess is they did what most startups do – look at the price their competitors charge.

Two problems with this:

• It assumes you have the same lead funnels, brand perception and offering to…