Setting next season's price rise: lira costs, euro contracts and the gap between them

A hotel rate increase next year should be set as a sum, not a percentage. Work out next year's cost per guest night in lira from written assumptions, add your target margin, convert at an exchange rate you state, then test the result against demand. The gap appears when lira costs rise faster than the euro price you can hold.

The contract arrives in autumn, in euro, for a season that starts next spring. Between the two sits a year of lira costs nobody can name yet, and the easiest answer is a round percentage that no one can check. After reading this, you will be able to build the number instead: a cost per guest night from written assumptions, a stated exchange rate, a margin, and a range you can defend at the table.

What should a next-season price rise actually be based on?#

On next year's cost per guest night plus your target margin, converted into the currency you will be paid in. Not on last year's price plus a percentage.

Define the unit first. Cost per guest night is the total operating cost of a period divided by the nights actually sold in it. That definition lets you compare two seasons with different occupancy on the same scale, which a raw annual cost total cannot do.

The percentage method hides its own assumptions. A round number bundles wages, energy, food, taxes and the exchange rate into one figure nobody can defend line by line. When the counterparty asks why 12 and not 8, the percentage has no answer.

The sum has four parts in a fixed order: this year's real cost base, next year's written assumptions, the currency conversion, then the market check. Order matters. Cost first, market second; if you start from what you think the market will bear, you are pricing to your own fear rather than to your cost.

The result is not one number. The build gives you a floor per room type and per season, and the market check decides where above the floor you sit. Keep the build in a file you can reopen, because the number will be questioned in the negotiation and revised when an input moves.

How do you calculate this year's real cost per guest night?#

Add every cost the stay consumes, divide by nights actually sold, and keep fixed and variable costs apart so you can see what a change in occupancy does.

Fixed costs such as rent, insurance, permanent staff and depreciation do not fall when occupancy falls. Variable costs such as laundry, food, in-room utilities and distribution commission do. Keeping them apart tells you whether a lost room night costs you the variable line only, or whether it pushes the fixed burden onto the nights that remain.

Distribution cost belongs in the build. Agency commission and contract discounts are a cost of the sale, not a deduction applied after the fact. In board and all-inclusive packages, food and beverage is a cost line inside the stay, not something outside the room price. If you want the deeper treatment of the all-inclusive cost structure, see all-inclusive hotel economics and the price floor.

Divide by nights sold, not by capacity. A hotel running at low occupancy carries a visibly higher cost per night, and that number is the honest starting point. Split the calculation by season and by room type where the mix is uneven, because an average across a year hides the periods that decide the result.

Leave capital projects out, but keep a maintenance reserve in, or next year's build will look cheaper than the building actually is.

How do you build next year's cost lines from written assumptions?#

Line by line, each with a number, a reason and a name, so the total can be re-run the moment one input changes.

Every line carries four things: this year's actual, next year's assumption, the driver behind it (a contract, a headcount plan, a tariff, a meter) and the person who owns it. The owner is the person you will ask when the number is questioned, so name someone who can answer.

Separate what you control from what you do not. Staffing plan, menu and laundry contract are yours; energy tariffs, tax rules and the exchange rate are not. Read the escalation clauses in your contracted services before you assume a figure, because the supplier has already written next year's increase into the paper.

Staff cost is a headcount plan plus the statutory items you can actually source; do not invent a rate you cannot show to an owner or an accountant. Use one contingency line rather than a hidden uplift in every line, so the reader can see how much of the total is prudence.

Run the finished model at three exchange-rate values instead of one, and keep all three in the file. Tax treatment changes the net you keep: accommodation tax and VAT sit between the price and the margin. The rates are not stated here; ask your accountant how they apply to your own mix. If you want the wider planning frame, see building next year's hotel budget month by month.

Which exchange rate should you use to turn a lira cost into a euro price?#

A rate you write down and can defend, applied consistently, with the sensitivity shown next to it. Not a forecast of where the rate will be.

The central bank publishes indicative exchange rates daily. That is a published reference you can cite in the file, and it is a spot rate, not a budget rate. Three choices are defensible: today's rate, the average of the past period, or a rate the owner sets as policy for the year. Each has a consequence you should state in writing.

Whatever you choose, show the euro price at that rate and at a worse one. The difference between the two is your exposure, and it is the number an owner actually needs to see. Do not build a rate rise into the model and then call it a forecast. Label it an assumption, with the date it was set.

The contract currency and the displayed price are two different questions. Currency rules for contracts and for advertised prices exist, and they differ by contract and by channel. Confirm how each applies to your own contracts and channels with your legal adviser and accountant. When the euro price is fixed for the whole season, the exchange rate is the variable that decides the margin, so it deserves its own line in the file. The currency question itself is treated in pricing hotel rooms in euro or lira when costs are in lira.

Why do lira costs outrun euro prices, and how do you see the gap?#

Because the contract fixes the euro price for the season while lira costs keep moving through it, so the same euro covers less lira of cost as the year runs.

The mechanism is simple: the euro price is set at signature, the lira cost per guest night is set by wages, energy, food and taxes, and the two only stay in step if the exchange rate moves with your costs. The gap can run the other way too. If the lira strengthens against the euro, your euro price becomes generous in lira terms and you may lose volume you could have sold.

Measure it as euro margin per guest night: the euro price minus the lira cost per guest night divided by the rate you are using. Track it monthly against the signed contract, not once at signature, because the number that mattered in October is not the number that matters in July.

Inside a signed contract you can still work on cost control, mix toward higher-margin periods and ancillary revenue; what you cannot do is rewrite a signed rate mid-season. Do not assume the market will absorb a mid-season correction. Plan the season on the price you signed and the cost you can control.

For example, take an illustrative hotel with these numbers. The contract price does not move while the margin does.

The point of the example is not the numbers, which are invented for illustration. The point is the shape: the price is fixed, the cost line moves, and the margin absorbs the difference.

How do you check the number against demand and the market?#

By asking what volume the price implies and whether the segments you sell into can carry it. The check tests the number; it does not produce it.

Start from the demand picture you can source. 2026 is flat: the Ministry of Culture and Tourism reported 25,758,545 visitors in the first half of 2026, down 2.39%, and TÜİK reported first-half revenue of USD 25.75 billion, down 0.1% (Ministry, August 2026 bulletin; Hürriyet Daily News, 31 July 2026). Use occupancy as context, not as a target: the occupancy rate in Ministry-certified (İşletme and Basit) facilities was 49.54% in 2025, and the Ministry does not state how it defines the figure (Ministry of Culture and Tourism, accommodation bulletin 2025).

Do not price against a competitor's published rate you cannot verify. Use your own pickup, your agencies' response and your direct booking behavior instead. Test by segment: a rise that holds in one source market may fail in another, and the mix decides which one matters. Test by period: shoulder months usually absorb more than peak, so a single annual percentage flattens a decision that should be shaped.

Set a walk-away volume, the occupancy below which the higher price no longer earns more than it costs, and write it down before the negotiation. Present a range rather than a point: a floor from the cost build, a target from the market check and a ceiling you will not go below in volume terms.

How do you take the number into the contract negotiation?#

As a documented cost build with a stated exchange-rate assumption and a range, not as a single percentage on a page.

Bring four things: the cost per guest night, the assumption sheet, the worse-rate case and the volume implication of each price level. Open with cost and margin, not with the percentage. A counterparty can argue with a percentage; a cost build with named drivers is harder to dismiss.

Negotiate structure alongside level: allotment or free sale, release periods, cancellation terms, payment timing and any currency or review clause. Keep your own website and early-booking prices on the same build, so the contract rate does not undercut the channel you control. A review point or a currency clause is often worth more than a point of rate, because it protects the margin you just calculated.

Record what was agreed and the assumptions behind it, so next year's file starts from evidence rather than from memory. For the negotiation itself, the preparation is covered in preparing a tour operator negotiation with the numbers to bring.

What to do next#

Build the assumption sheet this week: one page, one line per cost, each with a number, a driver and an owner. Run it at three exchange rates, add the margin, then take the range, not the percentage, to the table. The cost build produces the floor, the market check decides where you sit above it, and the exchange-rate assumption is what you defend when the season turns out different from the plan.