At every property revenue managers have to make pricing decisions that are crucial in maintaining a healthy bottom line, so it makes sense to use the best available tools for the job.
One of the most important - and potentially onerous - daily tasks for a revenue manager is keeping on top of competitors’ prices. That’s where rate shopping tools come in.
A good rate shopper helps you respond to your competitors’ prices and other factors, using quality data to provide actionable insights that allow you to boost hotel performance with minimal fuss.
With so many potential benefits, it’s no wonder that rate shoppers have become an essential tool for hoteliers. Here are some features to look for when choosing one for your property or properties.
Some rate shoppers only provide periodic reports, but the prices displayed need to be recent to be relevant. Analysing fresh data during instantaneous “live shops” means that you will see the latest live rates, allowing you to be a leader not a follower in pricing decisions and allowing for greater agility compared to your compset.
These days there are so many distribution channels in the matrix that checking each one manually is almost impossible. Sign up for a rate shopper that can gather data from OTAs both large and small, as well as regional channels such as Ctrip in China and Rakuten in Japan. Another priority is Brand.com - your hotel’s own site - where revenue managers strive to maintain their lowest rate, and the growing importance of metasearch means that maximising the channels you monitor is a must too. Finally, don't forget global distribution systems (GDS).
Comparing a wide range of channels is only one way of spotting a good rate shopper. Another is to focus on data purity, including features such as automated integrity control and advanced anomaly detection that make sure data is accurate, complete and reliable. After all, you can’t make good decisions based on large quantities of bad quality data.
Digging down into the details of a particular rate is essential if you want to compare apples to apples. After all, many hotels offer extras such as free breakfast or in-room Wi-Fi to drive business to higher rates, or include tax in their quote, and your rate shopper needs to be able to make a fair comparison.
Controlling distribution costs is hugely important, and a rate shopper that monitors parity for your hotel will help you to do so more easily. By tracking parity issues, you can easily see which OTA is undercutting your prices and quickly decide on a course of action.
Demand for hotel rooms can fluctuate depending on timing, trends, competition, holidays and events. Using a rate shopper with a built-in events calendar means that you will be best placed to leverage the opportunities they present, both locally and in different source markets. You will also be able to predict periods of high demand and close expensive booking channels to maximise revenue at these times.
To get the most out of a rate shopper, you will need one with a flexible interface that can easily compare different variables. Think about whether your property could benefit from using different compsets depending on the season, proximity, properties you aspire to compete with, or a reverse compset comprised of properties that use your hotel as a benchmark competitor.
Instead of comparing rates for just one night, your rate shopper should be able to gather data from your compset for bookings of multiple days. LOS is an important factor in revenue management, and monitoring it can help to reveal compset pricing strategies, whether that means special offers for longer stays during periods of low demand or minimum LOS conditions around big events.
Feeding up-to-date competitor rates into your Revenue Management System allows revenue managers to receive correct pricing recommendations. Automatic integration with data providers such as STR, Benchmarking Alliance, OlaKala or Fairmas means that hoteliers can access benchmarking data that allows them to compare performance on occupancy, RevPAR and ADR indexes.
Monitoring both pace and BAR-rates means that a good rate shopper will be able to identify trends both at your property and your compset, helping you to identify rival pricing strategies and act accordingly.
To take full advantage of features such as “live shops” you will need a rate shopper that always delivers. Rapid customer support is useful to resolving the occasional questions that you may have, and choosing a company with 24/7 support means that someone will be on hand whatever time zone you are in.
Finding a rate shopper that can accurately identify specific rate parameters is essential in order to observe granular patterns and ensure that you are making apple-to-apple comparisons in terms of flexibility, LOS, guests, meal plans and room type. As room types are so fluid - including breakfast and Wi-Fi can turn a standard room into a premium room without any physical change, for example - it’s equally important to be able to decide which room types are real comparable competitors in a market, such as through custom mapping.
There’s no point having a cutting-edge rate shopper if you can’t use it when you need it. Check that your tool offers multiple logins to improve communication between team members or revenue managers at different hotels.
Look out for any rate shoppers that develop point-of-sale (POS) functionality, allowing you to take rates from different domains (.co.uk, .fr, .es etc) of the same channel in order to provide an accurate snapshot of pricing in specific source markets around the world.
Revenue management means getting room prices right on a daily basis in a shifting landscape, and tracking KPIs means that you will have exploitable data that will prevent you from flying blind.
Ultimately, you need actionable insight to spot and leverage opportunities. If you have one, does your rate shopper make the grade?
You might also be interested in our related blog post, 7 must-have tools in today’s revenue manager’s tech stack.