Which pricing solution is right for your hotel?

There are many different pricing solutions out there, most of which are off-the-shelf systems. A few of these solutions can produce great results, and they all focus on evaluating demand and setting the right price. They are also all very expensive. Some teams are attempting to introduce new data into pricing decisions and optimization, highlighting the efforts to evolve traditional revenue management. So where is the problem?

These solutions don’t fit the needs of a lot of hotels in the market. There are many hotels that are simply not ready to use ultra-advanced pricing systems, possibly due to current lack of bench strength, maybe simply lack of capital, possibly due to other reasons. I have personally stepped into organizations that actually had a system installed and discovered it was not even being used. There are many hotels that in fact might not ever install one of those systems. Important note: That does not mean they do not need help improving their pricing.

Regardless which solution a hotel uses, all benefit from improved pricing. All the big box hotels constantly effort to improve this process… trust me. Sales and marketing are critical to nearly all hotels’ success… yet absolutely nothing trumps the power of pricing.

So which pricing solution is right for your hotel?

To answer that, I’ll ask another question: On a scale of ‘1’ through ‘10’ (1 being non-existent and 10 being expert) where would you rank your hotel’s revenue management strength? If you were about to answer 8, 9, or 10 then by all means go buy an expensive solution and I sincerely wish you the very best. If the number 1, 2 or 3 just popped into your head there is no doubt you are not ready for an off-the-shelf ultra-advanced system.

Ask yourself some additional questions. When evaluating a system that looks great because it offers 17 really cool features, how much ‘bandwidth’ is dedicated to the actual pricing? If the pricing logic is flawed or naïve, the impact will bleed into all the fancy features and you will no doubt leave money on the table… more than you think.

The right pricing solution for your hotel is the one that meets your needs. My advice is take a look around, make sure you understand all your options and get what you actually need… no more, no less. If you simply need help ensuring your price is competitive, moving in the right direction at the right time, and not missing opportunity then you likely do not need an overly expensive off-the-shelf system. Fortunately, there are some great options that produce excellent results.

All the best in your efforts… and mind the gap along the way!

Please feel free to join the discussion by leaving your comments, or contact me directly at askjames@fare11.com. Sign up for a free trial at Fare11.com today, and visit us on Facebook.com/nopricegaps.

Announcing Daily Hotel Rates!

Fare-1-1 is excited to announce the completion of the Dashboard – the industry’s first, complete, one-stop hotel rates shop. The powerful addition of Daily Hotel Rates empowers you with the right tools to do the job right, powered with hotel rate data (updated nightly) like no one has ever done before… a comprehensive list of rates from every single hotel in your market organized for your analysis by star rating. The application is designed for search ease and rapid query support… simply start typing the name of the hotel you are curious about and it will appear. Or, type your rate and you will immediately see who else is charging the same rate. Instantly. Just like a jet fighter pilot, you deserve the right tools to navigate and push your business forward. This includes the right software, hotel software is important in order to manage and control your business to meet the needs of the customers.

The Fare-1-1 Dashboard equips you with the powerful Market Fare Forecast, Lowest Daily Rates, custom user Daily Email Alerts and now the Daily Hotel Rates… everything you need to make more informed hotel pricing decisions. Quickly study your market with Daily Hotel Rates and Lowest Daily Rates, set your rates against the Market Fare Forecast ensuring you are properly positioned amongst your competitive set, and set your Daily Email Alerts so you know the moment anything changes.

Your revenue management system doesn’t do any of that.

Please feel free to join the discussion by leaving your comments, or contact me directly at askjames@fare11.com.

Sign up for a free trial at Fare11.com today, and visit us on Facebook.com/nopricegaps.

Why your Revenue Management System is handicapped

Regardless how much revenue management systems (RMS) cost they all have a severe handicap… garbage in, garbage out. Booking data is collected nightly, data is ‘crunched’ and a predetermined set of rates act as a pricing guardrail. If you are currently at $149 and your system thinks you should raise rate, you will get a recommendation to go to your next higher rate level of $179, if that is what you have built into your pricing structure.  If you set the next rate at $189 that would be the recommendation and here we stumble across the reason why your revenue management system is handicapped.  Set your rates wrong, and while your system recommendation may be directionally accurate, your rate will never be truly right… and you will always leave money on the table.

You invest time daily reviewing your reports, pricing recommendations, then you override the rates. You know you do. The very system that is supposed to save you time actually eats your time while you correct its mistakes.  What should your system do differently?

In a perfect world, your RMS would serve as a single version of the truth… one combined view of everything you truly need to make well informed pricing decisions.  You need to see your rate, the lowest competitive rate in the market, which direction the pricing is heading in and what the market will actually be priced at.  With all that information and insight, your pricing decision would be made simple. Powerful. Market share stealing!

Today, Fare-1-1 serves as your single version of the truth. We offer the Lowest Daily Fare in your market (organized by hotel star rating and length of guest stay), a Market Fare Forecast (organized by same parameters) and the pricing trend (which way is the market pricing moving?).

If your rate is set at $149 and the Lowest Daily Fare in the market is $159 you might feel a sense of comfort undercutting the competition. What you probably don’t know is the market is trending up, and the Market Fare Forecast predicts your competition will be at $199. This means you are not leaving $10 on the table, rather you are actually leaving $50 on the table. Per room night. If you recover $50 on just 10 room nights per week (5 rooms sold Friday, 5 rooms sold Saturday) that translates into an incremental $24,000 per year for your property (pure profit). You can recover a lot more money than that.

Once you set your rates, you’ll need to focus on other things… you can’t spend all day obsessing on just rates. Set your rate Alert and when any piece of the equation changes you’ll be the first to know… just by glancing at your email.

Your RMS doesn’t do that. Fare-1-1 does that.

Stop wasting time, stop leaving profit on the table.

Please feel free to join the discussion by leaving your comments, or contact me directly at askjames@fare11.com. Sign up for a free trial at Fare11.com today, and visit us on Facebook.com/nopricegaps.