GDU Ninja Update 22 - Part 6 Automatic Pricing Again
We did have a lot of conversations with properties who understand the benefits of Rate Flexing, but may not necessarily have known the dangers or difficulties of the different methods of pricing rooms. Its one of those things that sounds easy in theory but is fiendishly complicated and unpredictable in practise.
Pricing your rooms based on your competitors pricing for example requires their rates to be scraped from somewhere. The OTA's dont like their rates being scraped and its borderline unethical to scrape rates from a hotel website, and what if they have a special reason for their rates on a particular date ie A Wedding or a Conference? What if their rates change in the space of an hour? etc. How do you compare room prices when the room descriptions are different? (one of the most common issues).
If you have trained Revenue Managers who can use and interpret Rate Management Software this may be the way for you to go. We would also suggest that if you have staff sitting around doing nothing training and motivating them to flex rates may be another option the old fashioned manual way may also be an option.
However, for many small to medium sized properties we are going to be introducing in 2024 a 'First Step/Simple' rate management tool that will price rooms according to the quantity of rooms sold in the property using 'price buckets' that the property sets up. ie
If i only have 4 rooms eft sell them at 140€
If i have 8 rooms left sell them at 120€
If i have 12 rooms left sell them at 100€
etc, etc
We try to answer some of your questions here;
1. Can i have different price buckets for different seasons?
Yes you can, you can have as many as you want (although 'complexity' risks setting in here).
2. Will the pricing be based on the quantity of a certain room type (ie Double) or the overall quantity of rooms in the property?
In this first version it will be based on the overall quantity of rooms in the property ie 20 rooms.
3. What happens if i dont want to follow the 'Price Buckets' on certain dates ie New Years Eve?
You will be able to overrule the prices on any day you pick.
4. How will i know if the rates are set automatically or manually?
They will appear in different colours on the rates screen ie Green for 'Automatic' and Red for 'Manually Priced'.
5. Is this module going to be the ultimate rate management tools?
NO. If you have staff with time on their hands, we would argue it is better to price manually. If you employ skilled Revenue Managers it may be better to use more advanced forecasting software. BUT if you are not currently doing Rate Flexing, understand the benefits and dont have the resources to do it yourself, this could be the tool for you.
6. What are the benefits?
We would strongly believe that increased sales and occupancy is the major benefit, but by introducing the idea that rates go up as rooms sell you educate your customers and the market that booking earlier is cheaper (like the airlines!).