Technically speaking, rate shopping is nothing new. For years hotels have been comparing their room rates to the rates at competing properties, and making adjustments to be as attractive as possible to price-conscious travelers.
But even for those who actively engage in rate shopping, the process can be daunting. It’s a time-consuming task to look up competitors’ rates across various OTAs, compile all the data, and keep it updated on a regular basis. Ignoring competitors’ rates may be a liability, but paying attention is a distraction.
So how can hotels distinguish between extra effort and effective best practice? By automating the rate shopping process with modern software solutions.
Why is Rate Shopping Important?
The main reason it’s so critical that hotels rate shop is because their guests already do. The entire OTA industry is built on the idea of making it easy for guests to compare prices in real time. In fact, a recent survey from Expedia Group showed that price was the most important factor travelers used to decide where to book; greater than brand name or even guest reviews.
If your hotel is consistently priced higher than competitors hotels in the same area, it’s time to rethink your rate strategy. The old belief about lowering room rates to increase occupancy is no longer considered the best way to increase the bottom line, but being regularly out-priced can have drastic consequences. Keeping up with the competition requires dynamic room pricing that fluctuates based on guest trends, time of year, occupancy rates and even external factors like weather. When rate shopping is easy and accurate, hotels can precisely adjust their rates to be competitive without cutting into their revenue.
You can even elevate the bottom line if you incorporate rate shopping into marketing. Illustrating rate comparisons between you and the competition in your booking engine makes a powerful value statement while saving guests a lot of research.
Getting Started With Rate Shopping
Tools like Rate Shopper powered by nSight, which can be integrated into RoomKeyPMS, automate the entire effort. Instead of having to hunt down the numbers, hoteliers receive a regularly-scheduled email with a concise breakdown of competitor rates, separated out by booking channel.
Hoteliers can go directly to applying insights, transforming rate shopping from an obligation into a strategic asset. With modern, automated rate shopping, what was once a nice-to-have should be a priority for every hotelier.
Whether you’re using the RoomKeyPMS Rate Shopper tool or another automated system, it all comes down to knowing your competition. Identify your top four competitors, and use these tips to develop your rate shopping strategy:
- Make one individual responsible for rate shopping to ensure that important information isn’t being lost as multiple stakeholders analyse data. The reports are only valuable if they actually affect pricing, so make sure that person has the authority to affect change at the pricing level.
- Use rate comparisons as one factor in your broader revenue strategy. Lowering rates to match the competition is not always the best strategy, and it’s important to know what margin of error you have to nudge prices above your competition without losing business.
- Regularly reconsider who your top competitors are. As the local hotel market evolves, or your business changes season to season, you may need to focus on different properties.
Rate shopping is a critical component of a modern revenue strategy, and unlocks the full potential of your property. But without an automated system you’re in the dark, hoping to hit an ever-shifting target.
RoomKeyPMS regularly adds game-changing integrations like Rate Shopper. We take the tools hotels need and integrate them the way hotels want. Explore our offerings by contacting our team today.
Photo Credits: Shutterstock / jannoon028