Hotel Yield Management Strategy: Market Monitoring & Suggested Rate Changes

Share Button

Hotel revenue managers can always use a little help when adjusting rates. Manual rate shopping can help provide a view of the competition. However, without hotel software to help, hotel management could be missing a revenue opportunity. Oftentimes a rate shopper can provide data, but that does not give much insight into what the overall market is doing. This presents a unique challenge, because one or two competitors may have fallen asleep at the wheel. If those are the only hotels in your rate shopping routine, it can put your revenue to sleep too.

Rates are constantly on the move across entire cities/markets due to events, holidays or just good weather can even turn a mediocre weekend into a sell out in 24 hours. Without a good understanding of the direction the market is moving, you will lose out on hotel revenue. This issue is compounded when you take into consideration that these market changes could be happening 90 days out in the booking window. So how do you keep track of daily market activity throughout your forecast in order to still be competitive?

It was these problems that lead the Rate Shepherd team to develop our Suggested Rate Changes report. This report gives hotel management extra support to analyze the direction their competitors are moving their rates. Yield management becomes easier because when hotel rates are too low or too high, our report will identify the room type and rate that are out of line with the market. It will even suggest what your market rate should be to put you in alignment with your competitor’s position. Hotel management can then make an intelligent decision on how high or low they want to go given this information.

When one of our major brand customers in Vegas used our Suggested Rates Report for the first time, they quickly realized that they had forgot to raise their rates for one room on New Years Eve. Our tool quickly pin pointed this error and suggested a $100 dollar increase based on the market position. They took this suggestion and still sold out the room. Given that our product costs less than $100 per month, they quickly paid for year’s worth of our monthly fees with only one rate change. This is the type of value we strive to bring to our customers every day.

Share Button