Mr. McCartan

Revenue Management

Pricing Data is Your Buoyancy Aide

By Michael McCartan, Managing Director Europe, the Middle East, and Africa, Duetto

Competitor rate data should not be about price wars but used to effectively position your product to optimize the value of your offering. Consumers are not just looking for cheaper deals; they want a good deal. Gathering the right business intelligence will help you manage your rates according to market conditions without affecting the value and prevent your rates from damaging important OTA relationships. In this article we explain how you can use pricing data to manage competitors and your contractual obligations to OTAs.

Pricing data is your buoyancy aide

Pricing data has become a necessity and is influencing the value of products and brands for many different industry market places. The ever increasing popularity and importance of price comparison websites (for example electronics, food & beverages, car insurances and many other industries) has had and will have an impact on all industries including those that traditionally were valued as unique products - essentially meaning hotel rooms are no different to a can of soup.

Consumers now judge their purchase decisions based on two criteria, their expectations and price. Today product differences are almost less important than the important price factor.

Resellers, influenced by a change in purchase behavior, are reacting to price-sensitivity by lowering retail prices and creating best-buy packages in order to compete and survive during a difficult economy, however, negatively affecting the perceived value of products.

In the last few years as part of this movement, basic goods have been compared against more premium quality products, which has forced brands to take a different sales approach and engage with the markets more dynamically - this is especially prevalent for the hospitality industry. Hotels panicked and entered an almost uncontrollable price war previously only present in other industries. This has created one of the industries greatest challenges - to counter sinking rates and brand perception to remain buoyant while the economies calm and strengthen again.

Rates & Shopping data

The popularity of self-booking online has changed the shape of the hotel distribution landscape. Traditional outlets, like the GDS, have experienced falling priority to the favoured OTA sales space. In addition, alike other markets, the recession has caused hoteliers to drop rates in a bid to retain occupancy, which destroyed the opportunities of maintaining revenue.

Many hotels have struggled to improve their rates. Not only do they compete on global markets, but also now, with the increasing visibility on the web, local presence and their own websites have created new opportunities for selling online. However, those need to be fully understood and served properly in order to not lose out or create long term damage. In the past 12 months many major cities have seen their rates improve, but the economy is yet to fully recover and the industry must prevent itself from sinking again should there be another dip in the world's finances.

Product positioning is therefore a serious matter within the hospitality industry and today it is essential that each offering be competitively priced within the confines of the live marketplace. This requires the analysis of current data instead of relying wholly on historical booking patterns. Revenue managers need to constantly research prices and price patterns across multiple channels inclusive of various OTAs, the GDS and hotel websites for multiple room types and competitors.

Hoteliers should be no stranger to shopping competitor prices, just as they have always done, rather manual than automated. During the age of mobility, one certainly has to become more attune to ensuring the property's rates are accurately published across multiple channels. Generating rate reports weekly and checking into the most important channels daily provides a snapshot needed to make rate decisions in such a busy and time-consuming business role.

This data can be invaluable to hotels as they benchmark their competitors and pitch their rates that are in tune with market conditions. Although this is in essence the crux of online revenue management, hoteliers still have to discover how shopping rates can help to avoid negative consequences to minimal pricing changes, up or down.

Effects & Opportunities

Rate parity & OTAs: The biggest confrontation and decision for hotels is the management (or not) of rate parity. Consumers are looking for the best deal while OTAs are looking to attract the most customers. If the contract requires a certain rate, the hotel must deliver - with so many channels and room types it is important the revenue manager knows how the property is priced at any given point across all the outlets, while keeping an eye on what is agreed where.

As a hotel, if you state your offer to be the best available rate, you need to be sure this is the case. Without the entire view of the market you could discover a wholesaler has dropped the rate of your room below the rate you intended or may have even committed too. Furthermore, a human error of entering an inaccurate rate could put you in a difficult revenue position Pricing data helps you control and manage.

Competitor data: While shopping data is valuable in managing business partnerships it is also key to how your product is perceived - the price and the position are assets to the value of your brand. Competitor rate data will present the full pricing scenarios that helps pinpoint and establish the optimal level for rates.

Knowing both low and high competitor rates, websites' booking performance and product positions on OTAs will help revenue managers identify ways to raise and optimize prices which can improve the revenue stream and enhance brand value. Pricing data alone though will not be enough to out smart your competitors, combined with occupancy and historical booking data and you'll be ahead of the rest.

Corporate rates & dynamic pricing: One of the biggest effects of the recession is the impact on corporate bookings. Companies traditionally have helped to keep the hospitality business afloat, however rates have been damaged by price wars with many businesses requesting more competitive rates and contracts if traveling at all. The growth of internet price comparison websites has given procurement managers much more transparency for rates; therefore potentially damaging the relationship between hoteliers and existing corporate contractors.

Many hotels are now working on dynamic pricing models or hybrids, where fixed contracts provide stable income while having the benefit to further optimize revenue. For those models pricing data will provide a transparent view to avoid contractual problems. Managing prices based on market rates enables hotels to balance between rates and occupancy, and the consumer buying behavior.

Dynamic selling: Utilizing many sales channels provide for a better spread and exposure of product. In addition, with active management, channels can be optimized by redirecting inventory to a website that can fill the hotel with the appropriate rate. In practice this is channel management, but without live pricing data you would be unable to understand your competitors rates and subsequently the value of channels.

Strategic rates: The industry has always attempted to gain control of rates to secure the long-term future. Instead, during the recession, reacting to daily price fluctuations had become a necessity. Future rate data provides revenue managers with the business intelligence needed to strategically set rates by keeping a far distance goal in mind, the constant increase of product position and price and thus revenue. Once rates can be plotted more astutely to future rate behaviour hoteliers have more confidence to manage last minute availability. This rate manipulation both for today and for tomorrow will enable the hotelier to begin improving the value of the product and its price.

Case study

Diamond Resorts International has optimized its prices online both to gain a foothold in the market, fill its vacant properties far in advance while still working last minute business. The time-share company runs regular pricing reports across multiple channels and checks various competitors; this data is integrated into its Revenue Management System to optimize prices across all its sales channels.

This data shopping lets Diamond Resorts International manage rate parity and ensures all channels are committed to the right offer or promotion. Through benchmarking local competitors property prices can be changed to secure market position, optimal prices and therefore greater occupancy levels.


The internet continues to provide consumers with both price transparency and a better way to compare products. Without 'business intelligence' revenue managers will continue to struggle to provide a clear proposition for their property. Future rate data is therefore providing hoteliers with the information they need to position their brand appropriately.

As the internet progresses to the primary channel for bookings more benchmarking is required to keep up-to-date with the market and chargeable rates, probably multiple times a day.

However, access to continuous future pricing information will not be enough. The next generation of software solutions will need to integrate price points into daily automated routines, allowing a seamless interaction between the various systems, departments and individuals involved in revenue management.

Due to the increasing number of distribution outlets, product offering will improve, but also provide an administration burden that can hardly be managed manually. Hoteliers need to simplify the pricing process to cope with the vast array of emerging new sales channels, demanding corporate deals and high guest service expectations. The more integrated and automated pricing analysis is within your systems, the greater the opportunity to meet the requirements of the new sales environment which includes online marketing, social media interaction and guest review management.


Today hotels need to arm themselves with the right equipment that helps maneuver the stormy travel seas. Benchmarking data is essential information that needs to be used to make the right decisions. Positioning your brand has never been harder as hundreds of thousands try to achieve the same ranking and positioning on travel outlets. Within the competitive set, you therefore need to stay cool, judge information available and base strategies on facts rather than beliefs; you know your product; pricing data will help you to optimize its value.

An expert in the fields of hospitality and electronic distribution, Michael McCartan joined Duetto as Managing Director for Europe, the Middle East and Africa in 2014 to spearhead the rollout of the company's products and development of Customer Success teams throughout the EMEA region. Since joining Duetto, he has grown the European headquarters of Duetto in London, as well as establishing teams in Germany and Dubai. Mr. McCartan is adept at engineering creative solutions and then executing their delivery, understanding the exact needs of the client and the challenges surrounding the market. He is a valued member of the HSMAI Europe Revenue Management Advisory Board, contributing to articles and leading seminars and keynote sessions for the association. He is also a frequent speaker and panellist at major travel industry events across EMEA. Mr. McCartan can be contacted at +44 7557968806 or Please visit for more information. Extended Bio... retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by

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