In a blog post last week, we talked about how you can set hotel rates to maximise revenue. But this is not a set-and-forget activity. Monitoring market rates in real-time is crucial for hoteliers to ensure that you’re staying up-to-date in a dynamic market.
With such data, you can benchmark and adjust your rates with confidence. Without it, your pricing decisions are based on guesswork.
So how can you do this effectively? To answer this question, we've distilled some of the key points from our recently published eBook, How to price right: a guide to setting profitable B2C hotel rates, into a short blog post.
Remember that you need to strike a balance between selling some rooms in advance at lower rates, thereby guaranteeing occupancy - but holding some back to sell at a later date after raising the price as demand increases (knowing that you risk having those rooms unsold).
Some best practice tips:
Real-time competitor rates should always be taken into consideration when reviewing and adjusting your pricing strategy - not only will it help you proactively increase your revenue, but you’ll be able to see which OTAs, wholesalers or meta-sites are undercutting you, and act promptly to ensure rate parity.
But don’t be consumed by competitor comparison. Consider Game Theory and the Prisoner’s Dilemma - if hotels get into price wars with each other, then collectively you put yourselves all at a disadvantage.
Other factors to consider include:
Technology has advanced to the point that tracking and monitoring rates can be easy. So unless you want to spend the bulk of your time scrambling from website to website to collect market data, get rate intelligence software to do the heavy lifting.
A rate intelligence tool, such as Rate Insight, will put the data into an easy-to-digest format - so that all you have to do is analyse the data and respond to market demand. It would be impossible to keep up with market fluctuations otherwise.
This image above is an example from Rate Insight. As you can see, you can track the rate evolution of the price of a room for a particular day that you’re planning for. As the day approaches, you can see how competitors’ prices go up or down and respond accordingly.
Often, these tools have other useful built-in features - for example, Rate Insight also allows you to track other valuable metrics, like your OTA ranking and TripAdvisor reviews, and it includes an events calendar.
Business intelligence tools can also help you combat rate disparity, which is one of the biggest challenges for hoteliers. It’s essential to have a firm grip on your contracts and know where - and at what rate - your inventory is being distributed. Specialised tools do exist to track parity. For example, Parity Insight helps you monitor and enforce rate parity by allowing you to uncover discrepancies.
Putting these principles into practice should improve your operations significantly - and measurably.
Expanding on the series, the eBook covers how to set and monitor your rates based on historical and real-time industry data.