Hotel Prices Are On The Move
Everyone is painfully aware of how much flights can fluctuate from one moment to the next, and I am sure we have all had the experience of looking for flights for hours only to find out that the prices keep creeping up as demand is changing. Airlines have always been good at taking advantage of the finite number of seats available. We know it is a game, we know they are better at it than we are, and we usually just take our best shot and make the purchase.
Hotels aren’t nearly as sophisticated in their pricing and they can’t afford to be for a few reasons.
- Even though each hotel has a finite number of rooms there are typically plenty of hotels available
- Hotel room occupancy rates are particularly competitive metric that must be satisfied
- Although some hotels are clearly better than others. Two, 3 Star hotels are very much alike.
Even taking all of those examples into account hotel prices fluctuate a lot. Maybe not hourly like flights, but depending on day to day occupancy projections hotel prices can swing by as much as 20-50% as a way to ensure the fewest number of empty beds on any given night.
Hotels Are Trying To Make Money
Although it may not come as a complete surprise that hotels are using dynamic pricing to increase their ADR (Average Daily Rate) x occupancy rate metrics. What may not be immediately obvious is how customers can take advantage of the ebb and flow of hotel room rates. With volatility comes opportunity, but how can you possibly know when the prices will go up or down?
At Waylo we started our journey into the competitive world of Hotel Booking services as a smart Facebook Messenger Chatbot. We use AI (Artificial Intelligence) to learn the types hotels that you will prefer for your next holiday or business trip. While building our Smart AI based Travel Agent we realised that timing the purchase of your hotel room was just as important as selecting which hotel to book.
One of the first features for Waylo was adding the ability to track hotel prices. If the hotel you choose went up or down by a defined amount we would send an alert to the user that prices had changed. This feature fast became a huge success. Users would use the feature to watch hotel prices rise and fall for weeks before locking in the best price. This feature is not unique to Waylo. Indeed there are a few OTA’s that offer price tracking and will send emails when prices move. As a consumer knowing when to purchase can really help you save.
So what is the next step?
If the hotel doesn’t need to drop their prices or actually raises the price of their rooms, where does that leave our clients?
What if instead of just tracking one hotel you were able to track every hotel in an entire city? Perhaps every hotel won’t meet your search criteria, so even better would be every hotel in the city that meets your specific search criteria. That surely would be valuable. It turns out it is. Users are tracking hotel prices in and around every city that meets their stay preferences and are saving big time. Our users are able to save a minimum of 10% compared to other OTA’s and are saving more than 15% from their originally searched price results, just by using tracking.
Where do we go from here?
Hotels will continue to use dynamic pricing as it maximizes revenues and maintains occupancy rates. There are real advantages for hotels to continue this practice as they are able to fill rooms along the relative supply and demand curve of each given night/season.
Using a price tracking feature like Waylo offers, will enable users to take full advantage of fluctuating prices. With the right tools, and the right timing significant savings are available to anyone, and you don’t have to search 20 different OTA sites to know you are getting the best deal anymore. Let price tracking dictate your purchase flow and it will change the way you search for hotels in the future.
Also published on Medium.