These are all big & trendy terms in hotel industry.
In fact they are so big, they transform to be a culture, technology, solution to problems or a great way to earn more money.
But do smaller properties have to consider such terms as well? Can the this know-how be applied on small individual properties and be effective?
Theoretically, any business that identifies, that some people are likely to pay more for the same product than others, should think about these terms. Willingness to pay more, or pay less, for a specific product/service, comes from customer needs, ability to pay and perception of value. The best places that describe this are auction sites.
Same product is presented exactly the same way for everyone. But out of everyone, there are people that are willing to pay more for the product, according to how they perceive the value of it, how much they can pay for it, how bad they need it.
The same applies for customers looking for a room to stay overnight. Some will be able to pay more. Some will not even consider to pay. Every guest has a different need, different perception of value of where they will overnight, different ability to pay.
This means, that price for a room does not represent the same value for everyone. Ability to adapt the price according to customer perception of value is called Revenue Management.
In order to see if Reveue Management is needed for small properties, we need to understand the concept of customer behaviour.
Customers are very carefull in selecting the product/service they want to pay for. They spend time to analyze the value of it. They spend time to benchmark values across different products. The spend time to divide the value by the price it comes for. Then they make best selection for them.
This means that customers are very well aware of what options to spend their money they have.
If this is true, then shouldn’t each property owner be aware of those options available for his customers? Should owners understand what market has to offer, except their own product & service?
The answer is obvious. Any rational customer who will find another similair in price product, that represents more value to him, he will go for it. Any customer who will find another similair in value product at lower price, he will go for it. Any property owner, who is not aware of what options customers have, is not aware of how much business he is potentially missing.
Observing & understanding the market the way customers do is tricky.
As much as other similair products (competition) can be easily identified, as much as value can be assigned to each competitor fairly easy, monitoring their prices is problematic.
There are plenty of sources (OTAs & own website) properties are available at. Prices may differ across sources. Prices may also differ according to season/day, demand, promotion activities. On top of that prices may change as often as several Times per day.
Customer analyzes options & prices available only when they search for accomodation for a specific period. Owners should analyze them all the time, because different customers search for accomodation different times for differend periods.
The more owners know about the market, prices and competition, the more price decisions they can make. Lack of this know-how pushes owners to keep static price and keep hope this is a good price. Octorate has addressed this need, offering owners an additional service called: Rate Intelligence.
It is available under the Marketing Tab of Octorate:
Rate Intelligence is a robot that makes a very tough work of monitoring prices, very easy. Fully automatically. It searches several OTAs, for selected competitors, for prices, for every day. Then it presents the reults on the grap hor table.
There is plenty of information a Revenue Manager could use to make his daily pricing decision from Octo Rate Intelligence.
Revenue Management, pricing strategies, booking windows, price conditions, forecasting and optimization….become manageable though RateIntelligence, by every property owner.
However, the best part is, the interface is so easy – everyone can use it to become better in pricing without really knowing all these words. Just see who is more expensive who is not. See when. Evaluate if this i show you want it to be or not. And act accordingly.
Rate Intelligence is automatically switched on in Octorate. But in order to use it, it needs to be set up. Set up is very easy: all you need to do is select properties to analyze. In order to do so, go to Rate Intelligence.
There you will find a big button „Create New Rateshop”
After clicking the button, search for properties that you would like to monitor and select them. You can choose 3 of your competitors. But if you want to monitor more, please contact our support (support@Octorate.com):
Once you select your properties to monitor, please allow 24hours for system to set up all prices for you. From tomorrow, every day, you will have prices of your competitors under one click „Rate Intelligence” on Octorate.