As the competitive landscape evolves, Hoteliers must continue to increase their market intelligence and better understand the competition. Collecting and analyzing data about the competition’s rate strategy can be timely, costly and ineffective if you go it alone. Most properties and management companies know they need a rate shopping tool – and they need it now. This article highlights examples of how rate shopping technology is helping revenue managers be more effective.
The abundance of OTAs and other online resources gives today’s consumers unprecedented access to rate information in real-time as they make their travel decisions. To compete, hotel revenue managers must constantly increase their market intelligence. They need access to what their comp set is charging across all channels quickly, easily, and often. Advances are being made to make rate shopping faster, friendlier and more flexible by illustrating state of the art technology using case studies of successful users.
Rate shopping tools provide revenue managers with market-specific data enabling them to better understand their property’s position in their market rate mix, set prices more competitively, establish rate parity across OTA channels and, ultimately drive profits. Developers are continually introducing new technology to streamline this process. Making tools simpler and more cost effective even as they grow more sophisticated, developers are providing ever broader and deeper information.
Moving toward a Single Interface
Today’s on-the-go revenue managers need to be agile, and constantly switching between apps wastes valuable time. They want the flexibility to integrate their PMS with RMS with GDS, bringing in data and rates into one interface. Developers at the forefront of rate shopping technology are beginning to respond with tools that employ an API, making it possible for the first time to merge rate shopping data into any system the hotelier wants.
“Revenue management will always strive to get more tools integrated into fewer locations,” said Patti Halter, Senior Manager, Property Revenue Management Services of Best Western Hotels & Resorts. “New tools are being introduced all the time providing new data that can impact a hotel’s revenue. Once we begin to use them, we always try to pull them in to where they’re more accessible with the tools we’re already using.”
Coming out of the recession, Best Western implemented revcaster’s rate shopping tools rate shopping tools in 2012 in order to provide its North American properties with insights into what was happening in their markets and help them raise rates. At the same time, Best Western made expanded revcaster reports available to 400 hotels for which it provides fee-based revenue services.
Having seen a considerable increase in ADR at member hotels that take advantage of the tool, this year Best Western integrated revcaster with its revenue management program, BestREVSM, to expand access from its North American properties to all of its hotels. revcaster tools are now installed at 2,100 Best Western hotels in North America and another 300 across the globe.
Hotels for which Best Western provides revenue management for hire have experienced performance results as high as double the industry average. Halter credits this impressive achievement to the expertise of the company’s revenue managers and their ability to leverage an arsenal of tools, including rate shopping, to put together the right strategy for their hotels day in and day out.
Here are more examples of hospitality brands that have creatively employed rate shopping tools to great advantage.
Establishing Parity with Rate Shopping Tools
Since its launch in 2004, London-based distribution company HotelREZ has become one of the leading hotel representation companies dedicated to marketing and connecting independent hotels with bookers worldwide. As the company continued its expansion into U.S., Asian, and South American markets, bringing it to a current count of more than 650 member hotels in 27 countries, it became crucial for HotelREZ to access competitive rate comparisons for member properties and be able to quickly evaluate pricing dynamics.
In 2014, they leveraged revcaster’s API and created a tool within its own custom rate parity tool. revcaster provides price parity data for one- and three-night stays 10 days in advance. This data flows seamlessly and automatically into the HotelREZ reporting system, where it can be accessed in a flexible, open format alongside website analytics data and reservation data from the CRS. By compiling all of its data sources in one place, HotelREZ can provide its members with valuable insight to shape pricing, influence marketing decisions, and maximize revenues generated from all the different distribution channels.
HotelREZ creates its own reports to verify strategies that establish parity, increasing or decreasing the reporting data points as needed. These reports have reduced pricing errors and pricing anomalies across the portfolio and, in fact, transactions from hotels where HotelREZ saw pricing issues in the past have since increased by more than 20 percent.
A Leg Up for Future Hotels
Newer budget brand My Place Hotels of America launched in 2012 and is growing rapidly, currently numbering 21 properties in eight states. In an innovative application of rate shopping tools, the company implemented revcaster competitive data intelligence to standardize and optimize rates and evaluate markets for new properties before they open their doors. Once a week, they do a full-rate evaluation forecast 90 days out; the company also runs a 120-day report monthly to forecast market performance, availability and revenue.
“Rate tracking is set up for each franchisee to help them provide rate consistency and uphold the brand price niche with affordable nightly, weekly and monthly rates,” said Heather Schmidt, My Place Hotels’ EVP Sales & Marketing. “The competitive data also helps members maintain an understanding of the markets, so franchisees can trust their property’s room rates.”
As technology continues to hand travelers more intelligence with which to make their hotel decisions, IT developers are constantly honing the tools available to hoteliers to forecast and strategically set their rates in order to compete. The right rate shopping tool enables savvy revenue managers to access and analyze more relevant data more often with greater speed and accuracy, keeping them nimble and competitive as they strive to optimize ADR and, ultimately, positively impact the bottom line.
For an introduction to revcaster or take a tour to see what a valuable tool it is, please visit revcaster.com.