Rate Strategy: How to monitor your online rates
By Scott Nadel Chief Operating Officer, DMC Hotels/Dhillon Management | March 18, 2012
It seems that today's rate strategies have evolved far beyond yesteryears practice of a good solid guess based on a matrix of history, a hypothetical forecast, and the churning in your gut. With the exception of a sales team making outside calls, the arena of rate management used to stop at the reservation desk. Your rates were limited to the company you called on and what the reservation staff was given. Checking your available rates used to mean one report from one source. We only had to look at our own PMS to know what rate was available for the next day, month, quarter, and even farther if we really wanted to be on top of the rate game.
Now we have revenue optimization, dynamic selling, displacement software, data warehousing, online feedback, price intelligence systems. The list of sources available to make us more effective at increasing revenue is as extensive as you would like it to be. The reports we print at will today now combine much of the data we used to spend hours gathering separately.
Hotels now offer rates through a multitude of sale points. Not only do we have our in house reservation system and sales office, we have GDS, OTAs, third party sites, brand.com. You can book a room from virtually anywhere in the world at any given time, so our rates need to be available anywhere at any given time. That means the rates we choose after consulting our new and improved sources are now seen across the globe.
The challenge now becomes making sure we are truly selling the rate at these multiple points of sale when we want to. How do we know what the consumer sees is what we actually intend for them to see? Effectively monitoring your online rates involves two elements. Knowing how online shoppers see your hotel; and knowing how online shoppers see your competition.
When it comes to the online reservation game the adage that knowledge is power is most definitely true. Today's shopper literally has the entire world at their fingertips to decide when and where to make a reservation. They don't just call the property direct anymore. The availability of the internet has made today's travelers more informed and more knowledgeable. Third party booking sites allow potential guests to compare multiple hotels at once. Comparing you to the guy around the corner only takes a few clicks. Your rate is only one aspect of what the search for knowledge involves. While online shoppers are really looking for a deal, they still want value. They want to leave the World Wide Web feeling they are in control of the money they are spending. Your online presence is more than a good rate. To gain this booking euphoria they will discover what your property looks like and what your previous guest had to say about it. They will know what "hot breakfast included" really includes, and even what color the bedding is before they ever make their decision.
Your conversion ratio of looking for a room to booking that room with you will depend on how well you sell your guest that confidence. You need to be certain that your online presence will give today's traveler the information they need to book with you. You have to know what that shopper will see as they will see it. Take off your hotel operator goggles and look at your online position and the competitions position from the consumer's viewpoint.
If you really want to know what your competitor is selling, when he is selling it, and when he wants to sell it more, you have to become the shopper. When is the last time you booked a room at your hotel and or your competitor's hotel just to see what the experience is like? If your rate strategy doesn't include a process to finalize a reservation just like a guest would, you have an incomplete strategy. Too often we think we have everything in place and running smoothly. We think the work is done and there is nothing that can go wrong. Well you've heard this before but I'll say it again, that is usually when it does go wrong, sometimes horribly wrong. Don't just check online rates, book them. Know what the big picture of the online booking process for your hotel and your competitors really is.