Pricepoint is a pricing engine for hostels and hotels providing the most advanced solutions in the simplest form making revenue management accessible to all types of users.
Getting your prices right can be a challenge. There’s always this “what if” feeling. What if it’s too low and I leave money on the table? What if it’s too high and no one will book?
What if all this time I’m playing with prices, I’m wasting time? I would have gotten the same guests anyway.
Let us tell you something. It’s not a waste of time to keep on looking for the right balance. When you optimize your rates you can still attract the same type of guest, but by changing your rates dynamically you can maximize your profits — big time.
McKinsey & Company estimates that around 30% “of the thousands of pricing decisions companies make every year fail to deliver the best price.”
Which means an awful lot of lost revenue.
With the amount of data we have at our fingertips, 30% seems surprisingly high. That said, the guest and property performance data available via Guesty PMS helps hoteliers to make better pricing decisions.
Let’s uncover how you can build your revenue management strategy by leveraging that data.
Find out more about people who choose to stay with you
To build a pricing strategy, you first need to know who your guests are. What are they willing to pay? What channels are they using to book? How long do guests usually stay? Do they come for holidays? Business? Or do they mix both on workations?
You can find all this data in your PMS. Use the Guesty reporting tool to create guest segments. The knowledge you can gain from the reporting tool will shape your pricing accordingly within each guest segment, as well as your marketing and distribution strategy.
General PMS data – how your property performs
While your PMS helps you keep track of reservations, it also visualizes how your properties are performing. Use the Guesty analytics tool to see key performance indicators: occupancy, ADR (average daily rate), or RevPAR (revenue per available room).. This data should also help drive your pricing decisions.
Instead of moving forward blindly, these key metrics will help you spot the trends and show where there is room for improvement.
Together with the data on guests and property key performance indicators (KPIs), keep an eye on the demand in your market. Take into account :
- Major events in your area
- Flight and hotel booking trends
- What your competitors are doing
These factors impact demand, and therefore, should impact your pricing.
With local and major events like Eurovision, the Super Bowl, concerts, or business conferences, you can forecast higher demand and set prices accordingly. However,, there will be factors that are harder to react to quickly: changes in weather, volcano smoke cloud, last-minute cancellations – these rapidly changing factors can all cause demand to change. It’s important to adapt your prices quickly if you don’t want to lose an opportunity to increase revenues.
Another relevant factor that influences revenue management strategy is your competitors. That’s where using the rate shopper integrated with Guesty will give you benchmarking insights on what others are doing, and therefore the ability to spot events you might not have noticed or considered before.
Bringing clarity to the data
As you can see, building a successful revenue strategy involves a lot of data. And it’s all available to you while using Guesty PMS.
However, hoteliers have only so much time to dive into the numbers, create forecasts, and optimize prices 24/7.
Luckily hoteliers have multiple solutions in their toolkit that can eliminate the need to be on constant watch for changes in demand and manually adjusting prices:
- Automated revenue management systems: Pricepoint, which is integrated with Guesty, uses machine learning techniques to analyze data in your Guesty PMS, derive forecasts, and provide OTAs with optimal prices 24/7 in real-time.
Whenever there is a change in demand (for example, caused by a cancellation or new booking), Pricepoint automatically pushes new prices to your PMS or channel manager, making sure you always offer the best price possible to maximize revenue.
- Channel manager: Part of building a revenue management strategy is deciding on which channel guests will be able to book. It helps if you meet your clients where they are, and that means using various online travel agencies.
That’s why you need a channel manager to handle prices and availability.
- Booking through your website: A booking engine allows guests to book directly through your website. When it’s integrated with your PMS and channel manager, your availability and prices update automatically.
Once you integrate Guesty PMS, booking website, and your channel manager with an automated revenue management system like Pricepoint, it’s like a meeting of best friends. They are fine on their own but they need each other to keep growing. It’s the same for your business – these tools keep on supporting each other so your property continues profiting.
Connect your property data and real-time data to optimize prices
While you can analyze all the data available in your PMS and do the work of setting prices manually, tracking real-time data in the current fast-paced market can be very complicated.
Often, whatever you put in an Excel sheet will be outdated by the time you finish the analysis. That’s how fast-paced the market is now. Without technology support, you will be leaving money on the table by not reacting quickly enough.
Sometimes even a 1-hour delay in spotting a demand change means a lost opportunity for increasing revenues.
Using the clarity of the data you can find in Guesty and leveraging it with integrations like Pricepoint will help you grow revenues even in times of low demand and will help you react quickly in times where demand is very high.