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The Danger of Set & Forget Hotel Rate Management

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This recent hotel management article: Real World Tips for Driving Rate and Revenue highlights the trend in the hospitality industry towards the OTA relationship and how to drive revenue. The industry has seen tremendous growth with the transient customer and a preference towards last minute booking. Hoteliers are seeing the booking window shrink and it has become critical to closely monitor rates within the 72 hours window.

In the Las Vegas market most hoteliers change at least 10 rates per day over their 90 day forecast. That means, each day they are evaluating a change in yield for at least 10 stay dates in the future. However, many of the strongest competitors in the market make changes to all 90 days in the forecast on a daily basis. To further prove the point, many hoteliers make multiple changes per day to the rates 1, 2 and 3 days in the future.
Recently RateShepherd began tracking same day changes in the market to see how the transient customer is affecting yielding. We chose to look at two competitors with similar target demographics and price points, Hooters and Las Vegas Hotel. Hooters has had a tendency to lower their rates for the short term booking window, while LVH has tended to yield up as high as 40% for same day bookings.

Fortunately for the Las Vegas market rates changes have been trending up, suggesting that hotels are yielding up as the booking window shrinks. This is great news in response to the transient customers’ preference towards short booking windows and last minute decisions. Venetian seemed to play the game the tightest where only 19% of their changes resulted in a lower rate and 81% of their changes resulted in a higher rate. MGM properties followed with similar trends.

All of this information points towards a paradigm shift for hoteliers. In the past, occupancy ruled the roost. This is no longer the case. The new customer is driven by flexibility and short term bookings. Without a thorough understanding of the price changes in the market, hoteliers will lose revenue because their rates will not be competitive. The days of “set and forget” are over.

If you’re interested in how you can track your competitors using RateShepherd and our unique RapidWatch product check out our free trial.

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History No Longer Reflects the Future in Hotel Revenue Management

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Tnooz has a great article identifying 8 things that smart hotel revenue managers do differently.   The article can be viewed below:

Eight things smart hotel revenue managers do differently – Tnooz.

We cannot agree more with point number 8 stating that  “History is no longer a true reflection of the future“.  At RateShepherd.com, we remain dedicated to providing hotels competitive rate intelligence that allows hoteliers to more effectively manage price position in the forecast.   There are many companies out there providing historical rate analysis and trends for hotels. This article clearly points out that using history to shape the future no longer works.

In this technology age, the consumers are becoming very smart related to price. They have numerous tools to make their search for the best deal fast and easy for them, as pointed out in this article under “2. New vistas, new insights“.    For that reason, we believe that Hoteliers should be equipped with even more sophisticated technology tools to help them be competitive in their market.  After all, the consumer only has to worry about finding the best deal for their stay dates.  The hotel has to effectively manage their price position to attract the consumer for each and every day in the forecast.

If you are looking for a great competitive rate shopping tool for your hotel that will also provide you intelligence to help you quickly isolate rate position opportunities in your forecast, then please check our plans and pricing.  Please  contact us if you have any questions.

 

 

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