Pricing is naturally a major concern for hotel customers, and thus hotel professionals. But concretely speaking, what strategies are being implemented? Hospitality On addresses French hoteliers’ current practices.
Most hoteliers have adopted pricing strategies that allow them to offer the right price at the right time, as demonstrated by results from a survey of French professionals by Hospitality On. Thus, 91% of hoteliers declare that they practice flexible rates (43% apply this as their only strategy), this means prices are regularly adapted to market conditions. Close to half of hoteliers (44%) claim they also offer early booking rates for reservations made in advance (more than 30 days before the departure date), or last minute. These different practices are complementary for close to half of hoteliers that use at least 2 different price strategies.
As far as concerns price flexibility, the frequency of adjustment varies: 39% of respondents adjust their prices daily, showing a very strong reactivity of these professionals in light of changing demand. 26% adjust rates weekly, while 35% adjust them only monthly. Hotels are thus not all equal in their ability to react to pricing adjustments at the competition.
The channels through which the price strategy is "executed", meaning through which the new rates are made available to clients, are also different. 14% of hoteliers apply their rate adjustments to all their distribution channels, while most (52%) choose 2 or 3, usually direct and with one or two third-party channels that are often "OTAs" (booking.com, expedia...). One third of hoteliers adopt a flexible pricing strategy on only one channel, in which case they are generally direct rate offers (28%) rather than on OTA sites (6%). Thus, one is more likely to find advantageous promotional rates through direct reservations than OTAs. Hotel professionals should ask themselves: is this the perception of the general public today?
We may also observe that while more than 4 out of 10 hotels begin changing their prices more than one month before the start of the stay (and thus calculate their rates fairly well in advance), 42% of hotels only make price adjustments in the last two weeks before the date of the reservation, in an effort to have a clearer vision of the market before adapting their prices.
This analysis is an extract from the complete IPACH study, the study of hotel rates in Europe published by MKG Hospitality. A description is available here. To order it, contact Adrien Lanotte or Marion Jammet (research_order@mkg-hospitality.org)
As far as concerns price flexibility, the frequency of adjustment varies: 39% of respondents adjust their prices daily, showing a very strong reactivity of these professionals in light of changing demand. 26% adjust rates weekly, while 35% adjust them only monthly. Hotels are thus not all equal in their ability to react to pricing adjustments at the competition.
The channels through which the price strategy is "executed", meaning through which the new rates are made available to clients, are also different. 14% of hoteliers apply their rate adjustments to all their distribution channels, while most (52%) choose 2 or 3, usually direct and with one or two third-party channels that are often "OTAs" (booking.com, expedia...). One third of hoteliers adopt a flexible pricing strategy on only one channel, in which case they are generally direct rate offers (28%) rather than on OTA sites (6%). Thus, one is more likely to find advantageous promotional rates through direct reservations than OTAs. Hotel professionals should ask themselves: is this the perception of the general public today?
We may also observe that while more than 4 out of 10 hotels begin changing their prices more than one month before the start of the stay (and thus calculate their rates fairly well in advance), 42% of hotels only make price adjustments in the last two weeks before the date of the reservation, in an effort to have a clearer vision of the market before adapting their prices.
This analysis is an extract from the complete IPACH study, the study of hotel rates in Europe published by MKG Hospitality. A description is available here. To order it, contact Adrien Lanotte or Marion Jammet (research_order@mkg-hospitality.org)
