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Competition Comparison

Three methods for properly assessing the competition—no call-arounds needed!

By Jean Francois Mourier 
September 13, 2010

For any business, competitive pricing is the key to generating profits. Whether you’re selling food, clothing, or hotel accommodations, a successful company’s main goal isn’t simply to offer the lowest price, but to offer the best value for a consumer’s dollar. How does a business know how to determine whether or not they’re offering the most for the money? They must study their competition and strive to offer a better deal than their competitor.

In the hotel industry, hoteliers often use the practice of call-arounds to find out what type of deals and rates other hotels are offering. However, picking up the phone and pretending to be a traveler interested definitely isn’t the best practice. To start with, call-arounds are extremely time consuming. By the time you’ve reached out to all competitors, the rates could have easily changed. Another problem with call-arounds is that there’s never a way of knowing if the information is completely accurate. The other hotel might have known a competitor was calling and given out fake information or perhaps a lower rate was offered because the hotel had been experiencing an unusually slow month.

Method #1- P&L Statements
A Profit and Loss Statement can provide information on basic costs and expenses, which can be a great indication to how a business has done within a certain time period, as well as assist in predicting how the company is expected to do within the next month, period or year, based on averages and other factual information. P&L Statements can be compared to other companies during the same period, which can allow hoteliers to come up with trends, as well as make financial predictions for future periods.

However, P&L statements have certain limitations. For instance, some numbers on profit and loss statements depend on estimates and judgments on the current market. While trends allow for making educated predictions, other factors might not be reflected in the statistics of a P&L statement.

Method #2- Automated RMS
While automated revenue management systems in the hotel industry are still a relatively new concept, they can provide hoteliers with a wealth of opportunity to gain information about their competitors. Like P&L Statements, automated revenue management systems can provide statistical information; however, they also have the ability to compile online pricing for all hotels within a destination, and not just a hotel’s compset.

Additionally, automated revenue management systems use historical data, as well as thorough analysis of up-to-the-minute information to assist in making prediction on future room rate trends. And as sales channels continue to expand online and even in the mobile space, automated revenue systems can provided added information that can enable hotels to come up with more strategic marketing plans.

Method #3 –Surveys
When it comes to gathering information, surveys can often be one of the simplest and most accurate methods out there. Surveys are relatively easy to administer, flexible as they have the ability to collect a wide range of information based on a business’ specific needs and interests, and responses can be recorded, researched, and analyzed as in-depth as desired.

In the field of hotel revenue management, surveys can offer hoteliers with information that can help them develop and customize their own practices. For instance, survey information can help identify factors like whether hoteliers are using automated revenue management systems to their fullest, which techniques have most impact on the industry, how revenue managers are utilizing the latest advances in technology, and whether hoteliers prefer to use more traditional, hands-on strategies.

Specialized industry surveys can provide hoteliers with statistics into commonly used revenue management processes and strategies, attitudes about automated revenue management systems among lodging industry professionals, and proficiency of revenue management departments of hotels and resorts. Creating and keeping a competitive edge often hinges on knowing what competitors are doing, and what the best practices are in the industry as a whole.  A survey, once completed, will communicate that valuable information to both hotels and to the companies that serve them.

So are you looking to find out more about your competition’s pricing?  Want to know how they price their rooms and what revenue management strategies they use to increase occupancy and RevPAR? 

To take the first step in finding out more about your competition’s RM strategies, take the REVPAR GURU revenue management survey here.  Once all of the data has been compiled, REVPAR GURU will be sending out the survey results for free to everyone who filled it out so that they can find out the answers to all of their revenue management questions. 

And for one lucky hotel, Jean Francois Mourier, CEO of REVPAR GURU and expert in revenue management, will be offering a complimentary revenue management analysis, which will identify strengths and weaknesses in the hotel’s strategies and will offer practical ideas and suggestions to increase occupancy and RevPAR. 

Jean Francois Mourier is CEO & Founder of RevPar Guru, a company that has developed an alternative type of revenue management and real-time pricing solution (combined with automated online distribution) to help hotels maximize occupancy and increase their profits. The company’s Yield Dynamic Price Engine, an integrated revenue management and pricing solution, adds unprecedented power and real-time adaptability to the pricing process, leaving managers more time to run their hotels. You may reach him through or by calling +1.786.478.3500. 

786-478- 3500


Also See: Best Practices in Revenue Management, Part 3; Automation, Channel Management and Decision Making / Jean Francois Mourier / September 2010

Best Practices in Revenue Management, Part 2; Rate discipline, the leveraging of real-time information, and price prediction / Jean Francois Mourier / August 2010

Best Practices in Revenue Management, Part 1; General revenue management and strategic pricing / Jean Francois Mourier / July 2010

The Irresistibility of the Obvious; How a new trend in revenue management and metrics is missing the point / Jean Francois Mourier / July 2010

Pricing Beyond the Compset - And other new pricing strategies that really work / Jean Francois Mourier / June 2010

A Tale of Two Strategies; Contrasting boutique and chain hotel revenue management approaches / Jean Francois Mourier / June 2010

Historical Pricing Is History, Well, Not Exactly; Examining the Role Historical Pricing Should Be Playing in Hotels’ Pricing Strategies / Jean Francois Mourier / May 2010

Tipping Your Cap (Rate) - Why hotel owners need to pay attention to RevPAR / Jean Francois Mourier / April 2010

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