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.

Mind the Gap…

We have all worked with or simply met pricing professionals across the entire talent spectrum. What do they all have in common?  Unanimously, every single last one (even the greatest) leave money on the table.  It’s a simple fact. Some hotels leave little, others quite a bit – even the greatest hotels with advanced systems leave money on the table everyday.

Hospitality pricing professionals subscribe to at least a few different pricing techniques, with different strategies around property forecasts and pricing against what the market is demanding.  Unfortunately, today many pricing professionals are routinely in a reactive pricing position which always leaves money on the table.

The very intent and purpose of revenue management is to be proactive.

If you have great demand for a specific day, you might raise the price (usually up to the next higher price set in your system). You probably even spot check your rates against the comp set published pricing, to validate that you feel good about your new rate.  Set it and forget it (well, forget it for a few days anyway, then I’ll check it again… right?).

What if the market pricing is trending up?  What if people shopping you are comparing you against hotels not programmed into your STR report comp set (higher or lower ‘tier’ properties)? What if you are now priced at $159 yet the market will very soon be priced at $199? What if you knew that ahead of time – would you price at $179 instead of only $159? Maybe $189?  This is a Price Gap.

This is the definition of Price Gap: It’s not simply that you are priced lower than your comp set… it’s when your price point is lower than it should be… and you are leaving money on the table.

Mind the Gap. Identify your Price Gaps with the Market Fare Forecast and start capturing that Gap revenue today.

Now that’s being proactive!

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.

 

Set your price right and stop wasting time. Here’s how.

Piles of internal reports, competitive pricing reports, STR reports, emails from the sales team, all jamming your bandwidth and stealing your time.  Ok, usually all of these different sources of information have tidbits of valuable data, by the time you sort through it all and make sense of it valuable time has passed and now you’re late for the next item on your daily checklist.

Our team has practiced revenue management for years, and we have lived that scenario a thousand times.  It happens.  So how do you clear all that noise, save time, and make better informed pricing decisions?

You need a one-stop shop for pricing data, a tool that shows you the current published lowest daily rates, and right next to that the market fare forecast – what the competition will be charging, and what price you actually need to compete with.

If you price right at the lowest published competitive rates, you might feel good about that price today… until tomorrow when you see the competition raised their rates (or lowered them!). If only you had known that the market rates were trending up, or down, you could have been one step ahead with your pricing strategy.

Fare-1-1 delivers the Market Fare Forecast, Lowest Daily Rates, and published current Daily Hotel Rates.  Search through them with ease, see what specific hotels are priced at your rate, see who is priced higher and lower… with ease.  In seconds.

Your fancy, expensive RMS does not do that.  Fare-1-1 does.

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.