When it comes to setting competitive hotel rates, industry experts caution it’s best NOT to follow the crowd. Contrary to popular belief and practice, setting pricing based solely on analysis of competitor pricing, or “comp sets,” can actually lead to a reduction in hotel revenue. SkyTouch Technology encourages hoteliers to be aware of the following pricing myths and truths that can significantly impact hotel revenue management:
Myth: The comp set is the golden rule.
Truth: The competitor isn’t always right!
Blindly following competitor pricing can draw hoteliers away from optimal market price based on actual supply and demand. While it’s wise to have an awareness of competitor rates, it can be detrimental to overestimate the competition and their ability to price accurately. Ensure that your hotel has its own strategic pricing plan in place (one that isn’t dictated by comp sets), along with the proper resources and tools to help facilitate strategic revenue management.
Myth: When in doubt, guesstimate.
Truth: Automated Revenue Management takes the guesswork out of setting competitive rates!
The days of calculating comp set averages to set daily rates are numbered, at best. Today’s best-of-breed, cloud-based hotel PMS platforms feature built-in revenue management tools that enable hoteliers “set it and forget it.” The SkyTouch Hotel OS® platform provides hotels with an automated revenue management function that captures hotel and market data in real time so that hotels can employ self-optimizing daily rates. Hotels that utilize a PMS with real time revenue management features typically work smarter and more accurately while maximizing revenue.
Myth: Guests will always book based on brand loyalty and/or the lowest available rate.
Truth: Access to OTAs and a myriad of factors influence guest booking choices.
Today’s digitally savvy guests are more empowered than ever to shop and book on-the-fly using their smartphones and tablets. The prevalence of easily accessible OTAs makes it easy for guests to research, consume, compare, and make informed booking choices that cater to their individual needs and wants. Recognize that price alone is not always the determining factor. Influences ranging from traditional word-of-mouth, to social media promotion, to the availability of personalized amenities, heavily influence the booking patterns of today’s well-informed guests.
We’ve debunked the top pricing myths. It’s now up to hoteliers to utilize a hotel PMS that enables them to work smarter (but not harder) than their competitors to set, monitor, and modify hotel rates based on real time market conditions and demand.