Perishability and limited inventory are two most important aspects of hotel business & thus pricing of a room becomes one of the most important KPIs for a Revenue Manager. Thus, hotels cannot be living in silo and not monitor what their competitors are pricing and offering their prospective guests.
It’s no secret that hotels offer multiple rates combined with multiple room options and to track the competition multiply that to number of competitor hotels one has to track. This activity cannot be achieved manually thus comes the need for an automated price shopping tool. Using the data from their shopping tool, hotels can monitor competitor prices immediately, monitor their rates and maintain rate parity across channels & do an apple-to-apple comparison for various room/rate combinations in market and adjust their offering value.
21 Points to Consider while Buying a Rate Shopping Tool for Your Hotel
1. Freshness of hotel rates
How do you ensure that your pricing is relevant? To ensure correct pricing changes, it is extremely critical that rates shopped are recent and thus relevant.
2. Rate Details
Hotels tend to have multiple rates with various amenities and to have apple-to-apple comparison of their rates and its add on. A rate shopper need to give rate details of all the rates shopped.
3. Integration with RMS
As a RM you do refer to RMS which uses competition rates to benchmark and make rate suggestion and without an integration between RMS and Price Intelligence tool, hotels won’t have this information.
4. Ability to shop on Metasearch
Meta search sites are trying to grab the top spaces and competitor price listing from these sites has to be crucial to your hotel’s pricing strategy and a rate shopper which can’t shop from these will be counterproductive.
5. Ability to pull rates from GDS
GDS is the second cheapest option for a hotel to get room nights from after its website, hotels sell non-negotiated rates on GDS too; so without a rate shop from GDS making a pricing plan for GDS non negotiated rate will be difficult; as discussed in Pt 1 GDS data needs to be fresh too.
6. Capability to shop from Mobile Apps and Mobile Websites
New age channels also include Mobile options and with an increase in bookings made on the go, hotels are making offers exclusive to mobile, thus a pricing strategy for mobile needs to have competitor rates from mobile.
7. New age channel shop
Channels like Airbnb or rooms tonight have created a new market and to fulfill this niche of customers and impact of these sites; hotels are in need to track offerings on these sites and does your rate shopper shops from them?
8. Shop brand sites
Many tools do not shop from brand sites from competitor which is disadvantageous because we have observed that hotels have nearly 5:1 ratio in terms of rates they offer on their brand site vs. leading OTA sites; thus if your shopper is not shopping on competitor’s brand site then you are losing out.
9. Shop different rate types and identify them
Hotel rates have 2 types of conditions; 1 is cancellation specific where hotels restrict buyers from cancelling for getting a special rate; 2 is booking condition specific a discount is offered for meeting a specific condition is met. It would not be possible for a hotel to make a relevant comparison if their shopper is not able to shop for these different rates and highlight them in report.
10. Make a correct rate comparison by rate mapping
While we discuss different rate types a hotel has, there are variations in rates based on their inclusions, policies as well as different room types have these rates. Thus while a rate shopper can shop these various rate/room combinations, mapping them with keywords is crucial to ensure an apple-to-apple comparison.
11. On the go access
Just like the increase in on-the-go bookings, a hotel RM, you too need mobile-optimized rate shopper to get crucial alerts and reports to make that quick judgement call to pricing to stay ahead of the curve.
12. On Demand rate shop
While hotels will have their set of scheduled reports giving information about rates from the distribution landscape, there will be situations where a change in hotel dynamics owing to a sudden pickup/wash or a city event that hotel will need to make a change and see the impact and thus need for On-Demand shop can not be emphasized more.
13. Shopping for multiple LOS
A hotel guest has multiple days in their stays and thus keeping that in mind hotels offer rates based of their LOS, but so do their competitors and to make their rates and offering relevant, So to ensure you are making a relevant proposition you need to know what your competitor has to offer which the rate shopper should clearly show in the rate shopping report.
14. Capacity to distinguish tax inclusive rates from tax exclusive rates
OTAs operate in different models, while some present rates inclusive of tax to customers there are others who keep tax out of the price component, thus to have a correct idea of market offerings a hotel’s rate shopper should be able to separate the tax component from inclusive price and then present in a report along with tax exclusive price.
15. Product mapping on any key word
As shared earlier that hotel RM needs to have a correct mapping to do an apple to apple comparison in terms of Room/Rate combination but another aspect Hotel RM need is to map key words like WiFi or Airport Transfer to map similar rates they have on offer.
16. Regional channels
Certain regional OTAs have massive impact on a region’s OTA contribution such as CTRIP in China or Rakuten in Japan, thus having a rate shopper that does not shop from such OTAs and these region happen to be source market for the hotel is staying in the dark and hotel will never be able to draw a comprehensive pricing strategy.
17. Rate Movement
While hotels tend to look at their occupancy PACE using RMS/manual methods, they tend to not do this exercise for their BAR; by doing that they miss out on a critical trend on how their as well as their competitor’s pricing is moving. And by doing this analysis they can gauge their competitor’s pricing strategy. A rate shopper should be able to do that for the hotel.
18. Know age of data
We discussed that freshness of data is extremely critical for hotel’s pricing decision and when hotel RM makes his pricing decisions and refers to a report, it should properly mention when the rate was shopped and inform the RM of the age of this data so that no error is made owing to ambiguity of data age.
19. Enterprise capability
While a rate shopper is extremely important tool for a hotel, it is equally relevant for a region RM or a cluster RM to have an ability to shop and get data for multiple hotels in one access for ease of work and access.
20. Ability to shop multiple domains of same site based on source market
Another key ability that you need from your rate shopper is that it can provide rates from multiple domains of same site which you need to give a correct and relevant comparison from your source market.
21. Global Support
You need a rate pricing tool provider who can provide a 24/7 global support.
Rate Shopping Tool is thus a comprehensive Rate Intelligence solution & is useful for manifold purposes. The correct selection of Rate Shopping Solution cannot be stressed enough to adopt an effective and intelligent rate strategy.