What is hotel rate shopping?
Hotel rate shopping is the practice of tracking and monitoring hotel rates amongst your local market and competitors. It also involves tracking your own rates across your connected distribution channels.
Hoteliers use rate shopping to benchmark against other properties, optimise pricing decisions, and find opportunities to maximise revenue and profitability.
This blog will give you a full overview of hotel rate shopping and rate shopper tools, which you can use to boost revenue success at your business. Table of contents
Why is hotel competitor rate shopping useful?
Hotel competitor rate shopping is important if you want to maintain a competitive advantage in the modern hotel industry. Today’s market demands the adoption of dynamic pricing and hotels now regularly change rates daily or even multiple times in a given day.
Rate shopping your hotel competitor rates gives you the opportunity to:
- Optimise pricing: Understanding competitor pricing helps you set competitive rates, maximising revenue without sacrificing occupancy.
- Identify pricing gaps: You’ll be able to spot chances to increase rates without losing market share.
- Avoid rate wars: By monitoring competitor pricing, you can prevent unnecessary and accidental destructive price competitions.
- Improve forecasting: You can analyse competitor rate changes to predict demand fluctuations and adjust your pricing accordingly.
Keeping an eye on your local market and competitors shouldn’t necessarily dictate your strategy, but it’s invaluable for ensuring you always offer the right price at the right time to optimise profit. Hotel rate shopping made easy With SiteMinder you can easily perform rate shopping and take advantage of opportunities in the market.
What are the benefits of hotel rate intelligence?
Hotel rate intelligence isn’t simply about knowing competitor rates. There are a broad range of advantages that it opens up for your business including:
Benchmarking capabilities
Comparing your rates to similar hotels in your area helps you understand your position in the market.
With this knowledge you can identify strengths and weaknesses, set goals, and ultimately optimise operations.
Pricing strategy optimisation
Based on competitor rates and market demand, you can adjust your pricing strategy to optimise revenue.
This includes finding ways to differentiate yourself, targeting specific demographics, and pricing dynamically to boost your average daily rate and profit.
Better revenue management
With up-to-date market information and greater visibility, you can improve overall revenue management.
Increase occupancy and profit by tapping into known supply and demand trends – know when guests are willing to pay more to secure a room or when you need to add additional value to entice a reservation.
Data-driven decision making means you will always make the optimal move for your hotel.
Maintaining rate parity
Regular rate shopping will also allow you to see how your own rate is being displayed across all booking channels. This means you’ll be able to spot any discrepancies and make adjustments to maintain consistency.
Rate parity is important to avoid revenue loss and guest disillusionment. It will also make sure you avoid any potential penalties from the OTAs themselves.
Enhancing guest experience
With the proper market knowledge at your disposal, you’ll be able to tailor pricing and offers that suit your target segments, resulting in a better chance of conversions to bookings. This will also boost customer satisfaction because the guest will feel like they are getting value for money.
Since pricing intelligence tools will save you time, you can also place extra focus on other tasks including guest satisfaction.
What is a hotel rate shopping tool?
A hotel rate shopping tool is software that enables the practice of hotel rate shopping in an automated, digitalised, manner. You can monitor and compare your property’s rates against those of your competitors without the need to spend a lot of time doing it manually or creating reports.
A rate shopper provides real-time data on pricing fluctuations and can generate reports instantly, allowing you to make informed decisions about your rate strategy.
Advantages of using hotel rate shopping software
Here are the advantages you’ll gain from using hotel rate shopping software, instead of performing manual research:
- Increased efficiency: Rate shoppers can collect and display data much faster, produce graphs and dashboards for easy viewing, and generate instant reports for analysis.
- In-depth intelligence: With real-time data produced in a digestible format, you’ll be able to identify booking trends, seasonal patterns, and demand fluctuations easily.
- More confident decision making: With a rate shopper, you can be more sure the data is accurate and up-to-date, and you won’t make any mistakes in recording or displaying it.
- A single source of truth: Ideally your rate shopper will be a feature of a larger platform. So, in the case of a platform like SiteMinder, you’ll easily be able to generate the performance insights you need without other integrations.
- Stay on top: With the right data and clarity on what it means, you can always offer the most competitive price which will help you optimise both your occupancy and revenue goals.
How to use a hotel rate shopper
A hotel rate shopper will do a lot of your hard work for you but there’s still some decisions to make and some ins and outs of using one.
Here’s a good process to follow while using your chosen rate shopper:
1. Define your competitive set
Identify which hotels directly compete with yours for the same customer segment. Consider using criteria such as location, star rating, amenities, and target market.
2. Analyse competitor rates
Identify patterns in competitor pricing, such as rate changes based on day of the week, occupancy levels, or special events. You should also check the difference between your rates and competitors’ rates.
3. Track your own rates
Evaluate how your rate is advertised across all booking channels, including your own website, to ensure your rates are consistent.
4. Adjust your pricing
Use the gathered data to optimise your rate strategy to attract the most valuable guests at maximum value.
5. Track performance and analyse reports
With channel manager integration, you’ll be able to get extremely useful reports that let you see your historical performance, your best performing channels, your pace on previous time periods, and more. Pichata Ritchie, Cluster E-commerce Manager VALA Hua Hin – Nu Chapter Hotels
How to choose the best rate shopper for your hotel
Choosing the best rate shopper for your hotel will involve ticking off some of the most important criteria that you need met.
Generally you’ll want a rate shopper that makes it fast and easy to track the local market, and one that delivers powerful insights to aid your strategic decision making.
Look for a rate shopper provider that offers:
- Real-time insights on at least 10 local competitors
- Clear, digestible, data visualisation
- A single interface from which to access your insights
- Unlimited daily rate shops so you can always be in the know
- Transparency on your own rates
- Detailed performance reports
- Channel and country mix analysis
- A demo and/or trial to test suitability
Outside of this it’s important to do your research by reading some reviews and testimonials on rate shoppers you are considering. You should also ask yourself if you’re looking for a rate shopper only or a more sophisticated solution that offers additional revenue optimising features.
If you’re looking for a powerful, reliable, rate shopping tool that comes with a whole platform’s worth of features, then you’re in the right place.
