Author: CS Ramachandran, CRME, HSMAI Revenue Advisory Board Member & Director Revenue Management – South Asia, Middle East and Africa at Preferred Hotels & Resort
The big challenge for the Revenue Managers, in today’s times, is to manage rates across all a multitude of distribution channels and ensure that the hotels price strategies are reflected correctly across all channels.
On the other hand, rapidly changing technology is ensuring that the customers of today have more information in their palm of their hands than ever before. Travel Metasearch’s have made it easier to compare rates, and variety of review sites to compare products and services have enabled the consumers to have a better grip on the decision making process and not get overwhelmed.
Until recently, Revenue Managers still had the power of forecasting (or maybe gut in many cases, realistically speaking) that helped them to set their pricing for their rooms by market segment. However the emergence of pricing analysis tools from Google and other products such as Hopper is going to set out newer challenges which will test the skills of the Pricing teams of the hotels.
Google’s has been tweaking its “Hotel Search” algorithm to help travelers find the relevant hotels and the best price. With their recent July updates, Google is now testing “price insights” in its hotel search listing results. The Price insights will help a searcher understand if they are getting a good deal or not for a specific hotel, date range and hotel they are looking at. The algorithm tweaks also now helps the user to compare the searched hotel pricing against the rates of comparable hotels in the area for the same date range.
Another popular app in the Flight search and analysis space is Hopper. This is a mobile application that uses big data to predict and analyze airfare. Hopper provides travelers with the information they need to get the best deals on flights, and notifies them when prices for their flights are at their predicted lowest points.
Hopper has now brought the same pricing magic. With Hopper Hotels, the researchers will get expert price predictions, money-saving tips, and personalized hotel recommendations. The app also claims that their algorithm even learns which hotels you’ll love. This is added with immersive hotel stories and images right in the app to ensure the user knows the hotels are booked at the right price. The app’s functionality is limited to a small set of cities and is slowly expanding the set of hotels and cities.
Now this brings us back to where we started the topic. These tools open up a whole new set of options for the travel researchers to understand the pricing of the hotels and how to get the best deals for their stay. Hotels across many regions have been following the strategy of holding the prices high till a few days before arrival and then offer last minute deals. These tools bring the following questions to my mind and love to hear your thoughts on same.
- What would happen if these price strategies of the hotels start becoming public and shows up to the searchers?
- Would that impact the booking behavior patterns of the guests?
- Will we see a change in the lead time and length of stays of the bookers if the system starts showing them the best dates to book? Since there is a tool that advises to book accordingly?
- Will we have the evolution of providers like Rooms Ninja www.roomsninja.com Service https://getservice.com/ , who will monitor your booking for price drops and automatically rebooks you for the lower price in the same room you originally selected. TMCs like CWT have already rolled out the service of Price Tracking product worldwide which cancels and re-books for less, delivering significant savings.
- What impact will these cancellations and rebooking have on the pricing and revenue management systems we have, should these happen on a larger scale?
- How will we train our reservations, sales and other guest facing teams to handle the questions posed by the customer, when they are equipped with the power of information.
Sample Screens from the Google Price Insights and Hopper for your consumption