Setting the right rates for your hotel is crucial for attracting customers and generating profits. Using competitors’ prices as a reference can help hotels establish competitive rates. However, it is important to analyze competitors’ prices comprehensively and use them strategically, taking into account one’s own costs and differentiating from the competition. Additionally, it is essential to constantly monitor competitors’ prices to adjust your hotel’s rates according to market changes.
Analyzing competitors’ prices
In this section, we will discuss how to analyze competitors’ prices to establish rates for your hotel. It is important to gather prices from both your direct and indirect competitors to see how they compare to your own prices. Once you have collected the prices, you can use a spreadsheet to organize and compare the data. This way, you can clearly see how your hotel is positioned relative to the competition and decide on the most appropriate rates for your property. Additionally, it is important to take into account seasons, special offers, and events to effectively decide on rates.
There are many websites and apps that allow you to view your competitors’ prices, such as TripAdvisor, Booking.com, Expedia, and so on. We recommend using more than one of these sites to get a comprehensive overview of your competitors’ prices. There are also software programs and some booking engines that can automatically monitor competitor prices and provide valuable information for setting your hotel’s rates. Furthermore, it is essential to regularly check competitors’ prices to stay up-to-date and adjust your hotel’s rates based on market dynamics.
Using competitors’ prices to establish rates for your hotel
Competitors’ prices can be used not only for analysis purposes but also as a starting point for deciding your hotel’s prices and for having metrics on which to perform price tests.
Let’s look at some points:
- Evaluate the services and features of your hotel compared to those of competitors
It is essential to consider not only the prices but also the services and features that your hotel offers compared to those of competitors. For example, your hotel may provide a panoramic view of the city, a top-tier restaurant, or a wellness area, which can justify higher prices compared to competitors. - Evaluate the season and events to establish rates
During the high season, you can increase prices since there is higher demand; similarly, during events or holidays, you can raise prices. It is crucial to consider these factors and adapt your hotel’s rates based on market needs.. - Monitor and regularly update rates
It is not enough to set the rates once and forget about them. It is essential to monitor competitors’ prices and adjust your hotel’s rates based on market dynamics. This way, you can ensure that you offer competitive prices and attract more customers.
How to effectively manage your hotel’s rates
Effectively managing your hotel’s rates is essential and allows you to have a higher occupancy rate and adequate revenue. Let’s look at some strategies to do it correctly:
- Use technology to manage rates
There are multiple rate management systems (revenue management systems) that can help monitor competitors’ prices, set rates based on demand, and manage rates automatically, one of which is our partner Smart Pricing. By using these systems, you can save time and make informed decisions about your hotel’s rates in an automated way. - Collaborate with partners to manage rates
There are many partners, such as tour operators, travel agents, and booking websites, that can help you sell your hotel’s rooms. It is essential to work closely with these partners to establish competitive rates and attract more customers. Additionally, web agencies like ours can provide valuable insights to improve your pricing structure and increase your hotel’s revenue. - Flexible rates
Flexible rates are rates that change based on demand and availability. By offering flexible rates, you can attract more customers and increase your hotel’s revenue. However, it is crucial to manage flexible rates effectively to avoid losing money. Software like those in point one can help with this. - Non-refundable rates
Non-refundable rates are rates that cannot be changed or canceled once booked. By offering non-refundable rates, you can attract customers looking for more affordable rates. However, it is essential to manage non-refundable rates effectively to avoid losing potential customers or causing problems for existing customers - Use price monitoring tools
There are many tools available that can help monitor competitors’ prices, such as those that show which websites they are using to sell their rooms and at what price. By using these tools, you can get an overview of competitors’ prices and make informed decisions about your hotel’s rates. Additionally, price monitoring tools can help identify trends and seasonality in competitors’ prices, allowing you to adjust your hotel’s rates more precisely. - Monitor reviews
Customer reviews can provide information on competitors’ prices and how they position their hotel compared to yours. From reviews, you can verify people’s sentiment regarding rates and the quality of service provided. Moreover, by analyzing customer reviews, you can identify any issues or anomalies in a hotel’s rates and adjust them accordingly.
Establishing an optimal rate for your hotel
There are many factors to consider when setting an optimal selling price, such as demand, seasonality, and the location of your hotel compared to competitors. By using competitors’ prices as a reference, you can establish an optimal selling price that allows you to attract more customers and increase your hotel’s revenue.
Here are some ideas to improve your rate offerings:
- Offer pricing options
By offering pricing options such as discounted rates for early or extended stays, or “half-board” or “full-board” rates, you can attract more customers and increase your hotel’s revenue. By using competitors’ prices as a reference, you can offer pricing options that are competitive and attractive to customers. - Create packages and special offers
There are many factors to consider when setting an optimal selling price, such as demand, seasonality, and the location of your hotel compared to competitors. By using competitors’ prices as a reference, you can establish an optimal selling price that allows you to attract more customers and increase your hotel’s revenue. - Use dynamic pricing strategy
The dynamic pricing strategy involves changing prices based on demand and seasonality. By using competitors’ prices as a reference, you can use a dynamic pricing strategy to set your hotel’s rates to increase revenue and attract more customers.
