When the COVID-19 pandemic hit, the travel industry was greatly affected and there has been a downturn since—revenues dropped and the ability of hoteliers to forecast and price their rooms amid the pandemic has become nothing short of challenge. That is why, a precise pricing strategy is now more important than ever. In order to do so, hoteliers must now focus on broader data sets than just on the books (OTB), and historical data. However, collecting, collating, and analyzing data require hoteliers to invest more time.
But before we go on discussing how you can bounce back and achieve growth in revenue amid the pandemic, let us first guide you through the importance of data because it is, after all, the root to your hotel’s success.
What’s inside this blog?
- Why Data Matters to Your Hotel Pricing
- The Advantages of Harnessing Data in Pricing Decisions
- How RMS Helps Hoteliers Recover Faster and Stronger
- Frequently Asked Questions About Data-Driven Pricing
Why Data Matters For Your Hotel Pricing
With the rise of technology, more and more travelers are doing their holiday research and bookings online. In the digital world, data is everywhere. Data that is used includes but not limited to seasonality, demand pattern of the past few days, pick-up rates of the hotels, competitor pricing, and many more. That’s why hoteliers must make data-driven pricing decisions. Data-driven pricing strategy aims to maximize revenue for hotels by using data in order to determine how much customers are willing to pay for each room.
Having good data enables hoteliers to:
- Increase their revenues
- Identify trends
- Polish up operational efforts
- Be able to make the right decisions
In short, the data you gather can improve your decision-making for maximizing revenues. By exploring data, you can adapt to the current scenario and you will be able to give your guests what they want as well.
The Advantages of Harnessing Data in Pricing Decisions
Back when travelers had limited sources of knowledge, hoteliers had more freedom in decision-making. But in the digital world, online prices are transparent where travelers can compare prices. So when it comes to pricing, relying on your intuitions won’t work anymore.
Companies that harness data in pricing decisions:
- Can optimize pricing to maximize revenue – The data that is used for data-driven pricing strategy includes seasonality, demand pattern of the past few days, competitor pricing, and many more. Through artificial intelligence (AI), a Revenue Management Software gathers and interprets data that allow you to understand the market and provides the best rates to maximize revenue.
- Hold competitive advantage – Hotels that gather, evaluate and execute on relevant data, quickly will have a deciding advantage. Through the data you’ve gathered, you’d know how to leverage your resources for your data-driven pricing decisions. With Data-Driven Pricing Strategy, changes in demand patterns and other factors are calculated automatically for the best prices, helping you make the right price decisions. But instead of using the traditional and intuition-based pricing that is prone to errors, go for an RMS that has advanced AI capabilities, doing all the heavy lifting for you. With this, you already get an edge over your competitors.
- Have greater control over price positioning – Use the data to set dynamic prices. With the data collected, you will be able to maximize revenues through the dynamic pricing strategy where you use a repricing algorithm that allows you to adjust your pricing to changing market conditions and many other factors. These rules can be based on your costs, target profit margins, competitor prices, travelers’ booking patterns, the length of their stay, their preferences, and so on. But with so much data to be gathered and analyzed, it might seem impossible for a person to do all these real-time. Also, relying on human intuition alone is risky. Data-driven pricing strategy, with the help of an RMS, eliminates the risk of human error and helps you in decision-making.
Why Hoteliers Need To Adopt A Smart Revenue Management Software For Fast Recovery
Now that the customer behavior and booking windows have changed, selling rooms is not going to be the same anymore. So in order to recover stronger, hoteliers must leverage their data, put aside the OTB and historical data, and focus on the forward-looking data.
Using real-time and forward-looking data to analyze price elasticity, helps you make price decisions, and forecast accurately during the recovery phase. However, doing so takes a lot of time and is very difficult to do manually. Even a good number of teams can’t analyze all the data fast enough to make real-time updates. That is why hoteliers must embrace advanced tech solutions and automation tools.
With the right Revenue Management Software like ZEN eManager express, you can leverage the power of AI (artificial intelligence) to collect and analyze data for an optimized pricing result that’s miles ahead of the traditional method of intuition-based pricing. Amid this current COVID situation, ZEN eManager express not only gives you an edge on technology but also over your competitors when it comes to quick recovery.
It’s time you take the right step towards revenue recovery before your competition does. Book your free appointment now at https://www.zen-hs.com/book-a-meeting/ and let your hotel thrive again.
Frequently Asked Questions About Data-Driven Pricing
Q: What is Data-Driven Pricing Strategy for hotels?
A: Data-Driven Pricing Strategy is a strategy to maximize revenue for hotels by using data in order to determine how much customers are willing to pay for each room. Data that is used includes but not limited to seasonality, demand pattern of the past few days, pick-up rates of the hotels, competitor pricing, and many more. With this strategy, hotels can match their rates with customers’ willingness to pay, ensuring rooms are filled and maximizing revenue at the same time.
Q: How has the data for revenue management changed over the years?
A: Previously, revenue managers around the world had to use cumbersome Excel spreadsheets in order to store and analyze data for determining the most optimized prices. These sheets are hard to analyze and prone to mistakes in human intuition when analyzing them. However, as technology advances, there are now a lot of ways to store and analyze data automatically, removing the risk of human errors and increasing the accuracy immensely.
Q: What is the importance of Data-Driven Pricing Strategy during the pandemic?
A: As the pandemic continues, it’s very difficult to forecast what is going to happen in the next week or even the next month. Human intuition is definitely not enough to predict the correct prices for your hotel rooms. It is also difficult to keep up-to-date with the most recent regulation changes by the government, especially if you have properties in different regions or countries. With Data-Driven Pricing Strategy, you don’t have to worry as changes in demand patterns and other factors are calculated automatically for the best prices.
Q: How do Revenue Management Solutions help with data-driven pricing strategy?
A: In this difficult time, those who are more adaptable and quicker in analyzing the changes in the situation are the ones who will prosper. The best way to quicken the process of determining the best pricing strategy is to leverage tools that automate manual processes. That way, revenue managers can focus more on marketing and commercial strategies, leaving the pricing strategies to the hand of automated Revenue Management Solutions