Did you know there is high demand for a great spot to watch the 2024 solar eclipse and that your city is in a good location? When is the next sold-out event close to your property?
Knowing what is happening in your destination is a crucial part of an efficient price intelligence strategy. Understanding travel demand, knowing your competitors’ rate strategy, and reacting to unforeseen events can help you make better price decisions and increase your revenue stream.
It all comes down to one question: “How much should you charge for your room each night?” Even though pricing is complex and is also connected to your brand value, setting the right rates doesn’t have to be exclusive to large hotel chains and groups. Here’s how a hotel rate shopper can make this job easy for independent lodging businesses.
What is a hotel rate shopper?
Hotel rate shopping tools are essential to a dynamic pricing strategy today. They enable hoteliers to automatically check competitor rates to gain valuable insights into the market and make more informed pricing decisions.
Calling your compset to check their prices daily or switching between OTAs and manually registering them to a spreadsheet is unsustainable. It takes too much time, leaves space for too many errors, and is tedious. Besides, pricing is so dynamic that the data you collected might not be relevant by the end of the day!
Why should you invest in a hotel rate shopper?
There are many benefits of using a rate shopping tool. Here are the main ones.
- Save time: By automating the rate shopping process, revenue managers can be freed from the tedious task of maintaining manual spreadsheets, leaving them more time to concentrate on data analysis and pricing strategy.
- Make strategic, dynamic pricing decisions: Rates can change multiple times daily. Consequently, you need updated information to make the right decisions on your room prices.
- View real-time data: It’s crucial to have access to up-to-date rate information all in one place. This way, your pricing decisions are always based on the latest market conditions.
- Benchmark rates against competitors: You should be aware of patterns in the market by engaging in compset analysis. Benchmarking rates against your competitors for specific periods, like an upcoming conference or local event, is essential to effectively identify the market pricing trends and craft a strategic approach.
- Receive warnings: The alerts in advance of increased or decreased demand in the market can help you adjust rates and booking policies accordingly. This way, you can take advantage of opportunities and protect yourself from potential losses.
- Never miss a revenue opportunity: The perishable nature of hotel room inventory makes dynamic pricing especially important. Unsold rooms on a given night mean a lost sales opportunity that can never be regained. Optimize occupancy and revenue so your price is never too high or too low.
Adding the value of experiences
Pricing hotel rooms is complex, and it’s also tied to your value. Understanding travel demand and your unique selling point is the key to maximized profitability.
Travelers are not just simply looking for the best price. They are looking for the best deals and experiences. Before booking, guests often face comparison options where the price and value can make the difference. Consider this example, “Should a guest book a 3-star room by the beach or another room 2 minutes from the beach but in a boutique property with luxury amenities? “
The right price is not just about what your competitors are offering. It’s also connected to your perceived value. Setting too low rates can have devastating long-term undermining effects on your brand positioning.
Understanding your unique selling point is vital for optimizing your rates. Travelers want an experience that is worth the cost. The experience you provide can help you win more bookings.
Setting the right prices
In a recent survey by Expedia, 27% of people said that it’s the price they value the most when booking travel. Before deciding on a room, travelers compare hotel rates on major OTAs and metasearch platforms as the price is top-of-mind. Even more so today due to rising costs and inflation.
Independent lodging properties should not underestimate the impact prices have on bookings. A hotel rate shopper can help them become agile in adjusting their pricing to stay competitive. With this technology, hoteliers can understand the market landscape to set prices right and attract guests, adding experience to the final price equation.