Location Based Price Tracking; a Key Feature to Look Out For in a Rate Intelligence Tool
With advances in travel technology tools and travellers being more aware, the hotel industry has grown to become a highly competitive domain to cater to the needs of this new generation of travellers. This has led to extreme volatility too in its operations. In such a scenario, a key challenge faced by the hotels is how to sell their entire inventory and at the best possible price at all times in order to grow and maximize revenues, i.e. ensure high ADR & RevPAR.
This means that revenue managers have to rely on a lot of industry insights and competition data that could give accurate information about the pricing trends prevailing in the industry, besides analyzing the market forces and the day-to-day impact that it could have on the pricing strategy.
Undoubtedly, data is the key driving force that helps tech-savvy revenue managers take the right pricing and other decisions for their hotel, which empowers them to stay ahead or at least at par with the competitors. The availability of a highly advanced rate intelligence tool has put the process of manual rate shopping and data accumulation to an end. Technology tools employ the best-in-class technology to bring the in-depth competitive price intelligence on to the table of revenue managers in a simple, easy-to-consume and understandable format.
Geo-based pricing | Dynamic Pricing Based on Location
Dynamic Pricing is not a term that is unheard of in the present era of hospitality by revenue managers. In fact, it is one of the most frequented concepts in the hotel industry. Especially as we witness market forces in the industry fluctuating every now and then, even by the hours, hence requiring the room prices to be revised quite frequently, maybe many times a day.
However, what is important to note here is that the concept of dynamic pricing has also widened enough with time and market dynamics. It now takes into account multiple other factors that impact room pricing, which perhaps was not taken into consideration earlier.
Well, hotels have now started to delve down deep into the behavior of their competition like tracking their pricing strategy in different geographies, different modes of booking and different traveller personas.
Moreover, with OTAs playing an extremely significant role nowadays in online travel booking space, the accommodation providers have started to implement differential pricing strategy for targeting customers booking from everywhere. Like smart hoteliers and OTAs are tracking prices for the same property and same travel period using different approaches like – tracking prices of bookings originating based on their location (geography based price tracking) for the same hotel, based on the device used for booking (mobile or laptop) and membership status (close user group users/non-members) of the travellers
We will discuss more about Geo-based price tracking in the article.To understand it better, let us assume a hypothetical situation- Two friends Jack and Tom are planning a vacation in Mauritius. Jack, resides in U.S. and Tom in Australia. Both wish to book a particular hotel in Mauritius on a given date through a particular well-known OTA, say on TripAdvisor.
Now, there are chances that these two travellers might see an entirely different price for the same hotel for the same travel date, which results in them paying a different amount for the same type of room (obviously, in a different currency) to complete their booking. Jack pays 120$per night and Tom pays 135 $per night.
Well, do not be surprised! Point of Sale (POS) based pricing is the new trend in travel and hospitality. Not only travel industry, e-commerce industry is also using concept for pricing.
Geo-location prices of different hotels are being taken into account by industry players both hotels and OTAs as it gives them a sense of how competition is pricing their property in different regions and then, accordingly set (or change) their own prices.
What kind of a rate intelligence tool does a hotel need to price its rooms based on the location it is booked from?
Not all hotels and OTAs in the industry are aware of this extremely advanced pricing technique. Selected few technology vendors are offering this feature in their tool for competitive price tracking, which could place a hotel and an OTA a few steps ahead of others in their comp-set.
Of course, the understanding seems to be at a pretty nascent stage in the industry as of now, so is the availability of the feature as part of the rate intelligence tool.
Kudos to the remarkable technology improvements over the past few years that has made it possible for the hotels to receive the wealth of information for location-based competitive pricing knowledge at their fingertips with the help of a superior rate intelligence tool.
To gain superior understanding of the pricing strategy of the competitors, it is important to know their pricing strategy for different markets. This information could greatly help revenue managers optimize their own hotel’s pricing strategy. Hence, prevent any revenue leakages that might happen from the lack of this information.
A superlative rate intelligence tool, by tracking multiple data sources, produces dynamic competitor pricing reports, which enables hoteliers to react in real-time to the changing prices.
Therefore, it is advisable to go for a comprehensive and advanced solution based on your requirements and devise the perfect price strategy for your hotel!