Quantifying global chains’ advanced-purchase discount and members’ rate strategies

Pricing strategy. It’s a delicate aspect of revenue management: part science; part art; all-important for a successful hotel.

While your overall pricing strategy is a lot more than knowing which levers to pull and when - whether it’s lowering your prices to stimulate demand when times are lean, raising them to increase revenue when they’re not, or simply reducing them to reward customer loyalty - you still need a deployment plan for these levers.

And it’s quite a balancing act, albeit a seemingly simple one: after all, in the case of discounts, it’s just a question of when to offer them and by how much… right?

Well, yes and no. But there are things we can learn from how the big global chains operate in this area.

At OTA Insight, we first looked at this with our series of length-of-stay discount strategy reports, our two most recent regionally focused reports being ones for Europe and for the Middle East.

Based on hundreds of thousands of data-points from “shopping” on our rate shopper tool, Rate Insight, the results were revealing, inspiring us to look into other data projects.

In our latest research we looked at advanced-purchase discounting and members’ rates strategies. With millions of data-points spread across 45 days and more than 27,000 properties managed by eight global chains, the background and results - using weighted averages - are summarised here.

What we analysed

What we found in our advanced-purchase discounting analysis

Regional advanced-purchase differences

What we found in our members’ rates discounting analysis

Regional members’ rate differences

In summary, we can see that while all of the global chain properties we analysed offer members’ rates all of the time, unlike advanced-purchase discounting, which is only offered 78% of the time on average, the discount size is less generous; advanced-purchase discounts are on average more than twice as big.

How does your discounting strategy compare?