Quite often I receive an email from some intrepid internet based guy trying to sell me services to manage my business. After reading through the blurb it amounted to software that gathers information on the rates of your competitors by room, as an average or lowest rate.,
I have to smile because the data usually comes from scanning Booking.com and Expedia.
If you are not yet aware, Booking.com produces an excellent piece of kit called RateIntelligence - and it is free to use.
Booking.com email me my latest RateIntelligence link and you can start by going into settings to select yourself and your competitors. Be accurate here - I have a local chap that sells apartments at 3 month minimum let, I sell rooms with a minimum 3 day rental. We are not really competitors so I do not follow him, it would be pointless. Three other local properties mirror my own so I select these.
Select Calendar, and on the right side of the calendar there is a drop down box with the word 'calendar' the default setting. I select 'table' and what comes up is a list of rates over the next 30 days.
The top line is your property and listed in rows underneath are your competition. Select 'Lowest rate' for starters and your cheapest rate (ours would be the budget room) is compared across the competition. The software indicates if you are 1st, 2nd or 3rd in the rate for that particular room type. Changing the Room Type gives you similar results but per Room. No rate might mean the competition has no more rooms to sell of that room type, that is telling too.
You do not want to use this as the method with which to set your rate, you should be comfortable that you are fairly pricing your room before you use this software. What this does do is to see if you are out of kilter with the opposition. My competitor obvious uses it too as he is consistently €1 beneath my rate making him No. 1 and me No. 2 - if I undercut him by a €1 and he then responds by lowering his rate you enter into a stupid price war. I usually ignore it - I only lower if my rate is far too high to what the majority are quoting.
Take into mind that other factors take play - we have a sea view - he does not. He offers breakfast included, ours does not. At the end of the day, our review score and the fact we have been going 6 years will play against his 6 months with few reviews. Be confident in your business and customer loyalty.
I like to think it is a science, but it can become an art as to when to hold steady on your rate - even if you are 3rd because you know you will sell. Then again, when selling is slow and you find that your competitors have lowed rates, it means there is a drop in tourists generally and we are now competing for the few coming through. In this instance I will drop the rate to a level that is midway - being the lowest can sometimes make you look desperate.
I hope this was useful if you have not used this before. I would be interested in any tips from colleagues - I am sure there are many!