This blog posts corresponds to an episode of the RevGEN podcast. If you’d rather listen check out the video below!
We’ll start with a few talking points, and then as usual we’ll give you 4 quick tips to pick the best possible rate shop compset.
So just to start, let’s clarify that we’re talking about your rate shop compset. There are actually several different kinds of ‘compsets’,including STR report compsets ,your RMS compset, or you may even do a yearly SWOT analysis. The importance of a good rate shop compset though, is that it is probably the one that you are looking at most frequently
Rate shop compsets are particularly important because of the frequency that you are looking at these hotels. You and your revenue tean are looking at these hotels daily, so there’s no room to leave any misfits or one offs in your compset. You should be reviewing and recalibrating your rate shop compset quarterly to make sure that it stays as relevant and up to date as possible.
So with that said let’s get into those 4 tips that we talked about when it comes to setting up your rate-shop-compset.
Tip 1: – Don’t just focus on proximity!
Don’t just focus on proximity. The hotel that’s right next door is probably useful to have in your compset, but be sure you’re comparing apples to apples! Consider the type of hotel. Are you the only extended stay hotel in your rate shop compset? Is the hotel across the parking lot a 1-star dump? Consider things like the total number of rooms, and even things like review score.
Tip 2: Identify who shares the same demand drivers
I like to look at who shares my hotel’s same demand drivers. If your hotels is near an airport, picking something 20 minutes away downtown similar in size maybe be a good thought, but you are most likely looking at completely different customers. Same thing if you are a leisure focused hotel and picking a hotel in a business park. It may give you an idea of whats going on during the midweek, but if those are not customers you are working on attracting it may skew your rate decisions 4-5 days a week.
Tip 3: Add some hotels from your own brand if applicable
If you’re part of a major brand, add at least some hotels within your brand to make sure that your pricing is logical. For example, if I manage a Hampton, I would probably want a Tru, and then maybe an Embassy or HGI in my rate shop. This will give me an idea of where the more “economy” hotels, and the more full-service hotels are pricing within my brand’s hierarchy. We don’t have to always price in between these two, but if we are always $30 under the Tru, it may signal that there are larger problems going on with our rate strategy.
Tip 4: Know who is looking at you!
Request a reverse str, know who is looking at you. These may be hotels coming after your business, did you lose a group or LNR to a lower rate that you couldn’t match? It may help narrow down where some of your guests are going.
Thanks for reading!