In a time when the online market is changing the face of hospitality- from evolving complex distribution models to the growing competitive field- hoteliers need robust and dynamic solutions to not only simplify the process of rate shopping and rate management but to find a solution which provides real-time, actionable insights.
Technology can now accelerate and simplify the process of mining for valuable business intelligence, and when combining this with smart pricing strategies you will get ahead and stay ahead of competitors.
The 4 Key Areas where technology and data mining are revolutionising rate shopping with smarter Business Intelligence are:
1. Room and Rate Type Level Details - The need to compare apples with apples
With the market continuously changing and evolving- rates need to be accurately tracked and compared. Structures of room rates vary from:
- Room Types- how is a basic, superior or suite room defined at your hotel and your competitive set? Can you compare these correctly?
- Rate Types- are flexible, non-flexible rates covered? Plus the latest wrinkle in rate strategy- members room rates (exclusive to Brand websites)
- Meal inclusions- what does everyone offer? Breakfast, All-inclusive for resorts?
- Lengths of stays- are your competitor rates most competitive over 1 night, 2 nights, 7 nights?
Are all these variables even accurately tracked across your key online sales channels?
Using inaccurate and vague data solutions when comparing changing competitor pricing and rate structures across the different channels is detrimental to creating effective strategies to build and maintain a competitive edge.
2. Real-time forward looking data sources - The past is not a full reflection of future demand
Historical business intelligence and patterns can be useful in helping to manage a rate optimisation strategy, however there is a need to rely on additional data sources to gain a clearer picture for future demand.
The combination of historical data, weighting from market factors and variables (including holidays, seasonality and market changes) mixed with future forecast measures such as real-time market demand, on-the-books and key event details may affect your current demand- utilising these sources can help maximise the opportunity to drive revenue through each booking window.
3. Innovative Competitor Benchmarking - New data points to better understand your competition
One common market trend that some hotels choose to take on board is to “follow the leader” when it comes to competitive pricing and especially rate drops. This is a common practice when hotels are losing occupancy, in reality this is a one dimensional view, and can result in a real loss in revenue- with no actual long term gain for a hotel.
There are a variety of new insights that can be used apart from competitor pricing to help hotels make more informed decisions. Hoteliers can weigh up the analytics provided from booking pace, OTA visibility, rate evolution, local market demand and review scores to define the hotel’s most effective and profitable pricing and promotion strategy.
4. Channel Optimisation - Finding the right balance is the key to success
With channel management- it shouldn’t be a question of which channels should you work with, but rather what is the appropriate mix of channels you should work with. OTAs and wholesalers are a necessary part of business for hotels, they charge relatively high commissions, but in return they also generate marketing, awareness, traffic and conversions.
When working with OTAs and wholesalers- ensure they work hard for you and play the game by the rules- by managing and monitoring rate parity and enforcing dynamic pricing agreements.
The key is to ensure the right level of balance in support for OTAs. Evaluate each OTA based on commission charges, marketing exposure, site ranking/positioning, territory support and other benefits that these channels supply.
With current technological advancements in rate shopping and rate management - revenue managers should be able to spend less time manually monitoring the complex layers of information, by letting technology assist in collecting, curating and visualising their dynamic markets. This will allow them to spend more time planning the long term growth and development of their properties.