Right On Target
Web rate comparison tools help minimize the challenges of Internet distribution.
By Rebecca Oliva, Technology Editor -- HOTELS Magazine, 10/1/2003
It is hard to imagine the task of distributing rates on the Internet ever being simple. With challenges such as rate wars, sell-off rates and dealing with hundreds of Web sites, intermediaries and global distribution systems (GDSs) everyday, just keeping up seems difficult enough. But as hoteliers and vendors learn the tricks of the trade, programs such as Web rate comparison tools promise to alleviate some of those challenges.
While they are not brand new to the market, Web rate tracking systems are just now becoming a technology must-have for many hotels. These solutions gather rates from hotels’ competitors on a daily basis—taking the guesswork out of rate distribution to branded, merchant model and other travel Web sites.
“Hotels are definitely waking up to the realization that channel management is an issue,” says Ally Dombey, partner, Partners in Marketing, London, a consultant in hotel technology, distribution and channel management. “We are seeing in Europe a take-up of Web rate tracking solutions. From a yield management perspective, it is very useful because it enables you to track your competition. Rate parity is a key factor of using these tools.”
Perhaps the biggest benefit of these systems is the peace of mind it offers hoteliers when formulating their Internet distribution strategies. By understanding what kind of rates their competitors are offering, they can formulate a well-researched Internet plan.
Knowing Where You Stand
Web rate comparison tools operate similar to other
Internet-based reporting tools, such as accounting and CRM, because
they offer hotels direct access to data sorted by preferences. The programs
allocate information from a hotel’s chosen competitive set and
create an online presentation of which rates are offered at which times.
“One of the biggest benefits of the Web rate tracking system is that I can double check my own rate,” says Kari McClain, director of revenue management for the Doubletree Hotel Portland Downtown. The 235-room hotel recently deployed Chicago-based TravelCLICK’s RateVIEW solution, which benchmarks the competitive rates on Web sites such as Hotels.com, Expedia, Travelocity, Orbitz and others, as well as GDSs. RateVIEW gives the Doubletree Portland on-demand access to its own rates along with the ability to view competitors’ rates from the Internet and central reservation systems in real time.
The Doubletree Portland has been using the tool for three months as part of its initiative to be more aggressive on the Web. Internet bookings on sites other than its branded Web site have doubled year-over-year. McClain attributes the increase to the hotel’s aggressive Web strategy, which is partly due to RateVIEW’s comparison. More than 25% of all bookings come from its branded Web site, Doubletree.com, because it offers the guaranteed lowest rate available, the strategy of its parent company, Hilton Hotels Corp.
RateVIEW saves about six hours of labor per day because it relieves the staff of managing inventory on each site, McClain says. “It is very time consuming to make sure you have an accurate rate on every site,” she says. “It is almost impossible to spend that much time on Internet distribution.”
Aside from being a time-saver, RateVIEW also allows the Doubletree Portland to keep abreast of what is happening in the area. “We use it for our hotel to get a pulse on the city,” McClain says. The system supplies local information about special packages and promotional rates to ensure that the hotel stays competitive. “You can request a report as far into the future as you would like,” she says. “If we see a competitor’s rate go up, we know there is something happening in the city. We then know that we can be more aggressive.”
Yield Management Benefits
While Web rate comparison tools were first introduced
about two years ago, hotels are just now realizing
the value of these solutions. The reason? Dombey says like most hospitality
technology, Web rate tools are being bundled and marketed with other
hotel technology. “It
is representative of technology companies that are merging their technology
to find total solutions,” Dombey says. “Web rate tracking
solutions and revenue management systems have the potential
to integrate as well.”
So far, a handful of vendors have formed agreements to link their systems: Optims, Evry, France, teamed up with eRevmax, London, and Ez Revenue Management, London, recently debuted a new system in partnership with London-based Electrobug.
Thistle Hotels Ltd., London, began using eRevmax’s Rate Tiger and Optims. Despite Rate Tiger’s link with Optims revenue management system, Warren Mandelbaum, area revenue management, Thistle, says he opted not to integrate the two systems, but use them in tandem. In essence, the integration would allow the Web rate solution to feed information into the revenue management system and use that data to automatically conduct forecasts. “We want the revenue manager to be totally in control of the rates,” Mandelbaum says. “We depend on technology to help us make the strategy, but we want to make the final choice.”
Instead Mandelbaum sees Rate Tiger’s reports more beneficial as measures of the demand in the London area. Since last year, total business via the Internet for Thistle’s 56 hotels increased 130%. “Basically, Rate Tiger gives the hotel an understanding of what the demand is and what is happening so we choose our rate wisely,” Mandelbaum says. For a monthly fee of GBP130 (US$205), Rate Tiger interrogates Thistle’s competitors’ e-distribution channels and gives real-time rate availability. The system offers a combination of daily competitive pricing reports up to 90 days out and online analysis of competitive set rates. In addition, Rate Tiger has a special feature called “lowest available rate reports,” with which hotels can analyze how they are competing within a specific e-business source.
Mandelbaum says Thistle’s selling strategies on various Web sites has improved. “The system gives us an idea of how the competition anticipates their demand; allows us to find out who is enforcing room type and night stay control; and gives the perception of how the hotels are viewed by the consumer,” he says.
The reports are detailed and can be categorized by single or double occupancy, average room rates by particular day and number of room nights. “It gives us an idea of our positioning in the marketplace and the demand that is coming,” Mandelbaum says. “It is basically a yield management system that is able to maximize revenue by suggesting the optimal rate—not the lowest rate.”
Automatic Comparison
Other revenue management system vendors have gone
further— completely
combining Web rate comparison tools with their systems. Radisson SAS
Hotel Amsterdam Airport recently deployed Ez-COMPETETM by EasyRMS, which
uses Electrobug Web rate tracking technology to make forecasting recommendations.
Although the entire system has not been installed yet, Idan Velleman,
revenue manager, Radisson Amsterdam, says the system will save time,
money and allow the hotel to make well-informed forecasting decisions. “Electrobug
will allow me to get some more market information and then form a strategy,” he
says.
Ez-COMPETETM features a Competitor Analysis module that sends data that lists Radisson Amsterdam’s own Web and GDS rates along with its competitors. The second part of the system, called the Decision Support module, enables automated and competitive insight into pricing behavior throughout all online channels. Simply put, when used in conjunction with the EasyRMS system, both features allow the 279-room hotel to control and price inventory intelligently within all distribution channels by using the reports.
Although it is Electrobug’s Web rate comparison technology, it is fully customized for EasyRMS. For instance, each screen has been redesigned to have the look and feel of the rest of the EzRMS product suite—making it a one-stop solution for the hotel. At a cost of v150 (US$163) per month, the Radisson Amsterdam uses Ez-COMPETETM to determine which Web sites will produce the most revenue for the hotel. “It merely helps me to decide which channel distributors I want to work with,” Velleman says.
Since it is an airport hotel, most of the hotel’s reservations come from the GDSs, 4% comes from the Internet and, of that, 8% of reservations come from Radisson’s branded site, Radisson.com. Velleman says Internet reservations continue to grow and, therefore, he and his team require a sophisticated system to help them position themselves competitively in the marketplace. When the system does become automatic, Velleman says he hopes to see an increase in overall Internet bookings and expects the automation to save labor hours.
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