Streamline Your Hotel Pricing Strategy with Advanced Rate Shopping Software (2023)

In the competitive landscape of the hospitality industry, setting the right prices for your hotel rooms is crucial for maximizing revenue and staying ahead of the competition. One essential tool that can significantly enhance your pricing strategy is a hotel rate shopping software.

But before delve into the relationship between rate shopping softwares and revenue management, and how these tools work in synergy to optimize revenue generation, let us first understand Rate Shopping.

Table of Contents

What is Rate Shopping?

Rate shopping refers to the practice of monitoring and analyzing the rates of your hotel competitors across various online channels. It allows you to gain valuable insights into the market dynamics, understand the pricing strategies of your competitors, and make informed pricing decisions for your own property. By comparing your rates with those of your competitors, you can identify opportunities to adjust your pricing strategy to attract more guests and optimize revenue.

What is a Hotel Rate Shopping Software?

A hotel rate shopping tool is a software solution that automates the process of monitoring and analyzing competitor rates across multiple online platforms. These tools gather real-time data on room rates, availability, and booking patterns from various sources, providing hoteliers with comprehensive and up-to-date market intelligence.

(Video) How Hotels Price Rooms

Benefits of Using Rate Shopping Tools

Rate shopping tools provide hoteliers with valuable market intelligence, allowing them to monitor competitor rates, track market trends, and make data-driven pricing decisions.

Let us try and understand the benefits of using rate shopping tools, and how they can enhance your hotel’s pricing strategy.

  1. Real-Time Competitor Insights

    A rate shopping software offers real-time data on competitor rates, availability, and booking patterns across various online channels. This allows you to gain valuable insights into your competitors’ pricing strategies, identify market trends, and adjust your rates accordingly. By staying up to date with the latest market information, you can make informed pricing decisions and maintain a competitive edge.

  2. Competitive Pricing

    One of the key benefits of a rate shopping software is the ability to monitor competitor rates comprehensively. By comparing your rates with those of your competitors, you can ensure your pricing is competitive and attractive to potential guests. You can identify pricing gaps and opportunities in the market, adjust your rates dynamically, and position your property strategically to attract bookings.

  3. Rate Parity Monitoring

    Maintaining rate parity across different online channels is crucial for a fair and consistent pricing strategy. Rate shopping tools enable you to monitor rate parity, ensuring that your rates remain consistent across various distribution channels. By identifying and rectifying any rate discrepancies promptly, you can avoid guest confusion, protect your brand reputation, and optimize revenue generation.

  4. Historical Data Analysis

    Rate shopping tools often provide historical rate data analysis, allowing you to identify pricing patterns, seasonal variations, and demand trends. By analyzing historical data, you can uncover insights into market behavior, understand the impact of past pricing decisions, and make informed adjustments to your pricing strategy. This data-driven approach ensures that you are well-prepared for future market conditions.

  5. Enhanced Revenue Management

    Rate shopping tools work in synergy with revenue management strategies. By integrating rate shopping tools with your revenue management system, you can optimize pricing, inventory management, and distribution strategies. These tools provide the data and insights necessary for effective revenue management, allowing you to maximize revenue and profitability.

  6. Accurate Forecasting

    Rate shopping tools assist in accurate demand forecasting by providing access to historical data and market trends. By analyzing past patterns, booking trends, and demand fluctuations, you can forecast future demand more accurately. This enables you to adjust your pricing dynamically, allocate inventory effectively, and optimize revenue during peak and off-peak periods.

  7. Improved Operational Efficiency

    Automating the rate shopping process through dedicated tools saves time and effort for hoteliers. Instead of manually monitoring competitor rates across multiple platforms, rate shopping tools streamline the data collection process and provide consolidated reports. This allows you to focus on analyzing the data, making strategic pricing decisions, and implementing revenue management strategies.

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  8. Data-Driven Decision Making

    Rate shopping tools provide you with comprehensive data and actionable insights, empowering you to make data-driven pricing decisions. By relying on accurate market intelligence rather than intuition or guesswork, you can mitigate risks, optimize revenue, and maximize profitability. Data-driven decision-making ensures that your pricing strategies are based on solid evidence and align with market dynamics.

By leveraging the power of rate shopping tools, hotels can stay competitive, attract more guests, optimize revenue, and achieve long-term success in the dynamic hospitality industry.

How Can You Use Rate Shopping to Devise Competitive Strategies?

  1. Identify Market Trends and Demand Patterns

    Rate shopping tools provide valuable insights into market trends and demand patterns. By analyzing competitor rates and tracking booking patterns, you can identify high-demand periods, seasonal fluctuations, and market dynamics. This information helps you anticipate changes in demand and adjust your pricing strategy accordingly. For example, if you notice that certain dates consistently have high demand in your area, you can strategically increase your rates during those periods to maximize revenue.

  2. Optimize Pricing for Different Guest Segments

    Rate shopping allows you to analyze competitor rates for different guest segments. This insight enables you to optimize your pricing strategy based on the characteristics and preferences of your target audience. By understanding how your competitors are pricing their rooms for specific segments, such as corporate travelers, families, or leisure guests, you can tailor your rates to be more competitive within those segments. This approach helps you attract and capture a larger share of your desired guest segments.

  3. Dynamic Pricing Strategies

    Rate shopping empowers you to implement dynamic pricing strategies. Dynamic pricing involves adjusting rates in real-time based on factors such as market demand, competitor rates, and availability. By monitoring competitor rates, you can make timely adjustments to your own rates to ensure you remain competitive. For instance, if you notice a competitor offering lower rates for a specific period, you can respond by offering a promotional rate or adjusting your rates strategically to attract potential guests.

  4. Enhance Rate Parity and Distribution

    Rate shopping tools help you maintain rate parity across various distribution channels. Rate parity ensures consistent rates for the same room across different online platforms. By monitoring competitor rates, you can ensure that your rates are in line with those of your competitors across all distribution channels. This not only helps maintain rate integrity but also provides a fair and level playing field for your partners and customers.

  5. Strategic Positioning and Packaging

    Rate shopping enables you to position your hotel strategically within the market. By analyzing competitor rates, you can identify pricing gaps and opportunities that allow you to differentiate your property. For example, if you notice that your competitors are charging a premium for certain amenities or services, you can consider bundling them into attractive packages at competitive rates. This strategic packaging approach can help you create unique selling propositions and increase your market share.

  6. Improve Revenue Management

    Rate shopping tools can be integrated with your revenue management system to optimize pricing decisions. By leveraging rate shopping insights, you can align your revenue management strategies with market dynamics and competitor positioning. This integration helps you make data-driven decisions regarding pricing, inventory allocation, and distribution, resulting in optimized revenue and profitability.

  7. Monitor Performance and Evaluate Results

    Rate shopping tools enable you to monitor the impact of your pricing strategies in real-time. By tracking key performance indicators (KPIs) such as occupancy, average daily rate (ADR), and revenue per available room (RevPAR), you can evaluate the effectiveness of your competitive pricing strategies. This ongoing monitoring allows you to make data-driven adjustments and refinements to your pricing strategy to ensure long-term success.


To effectively use rate shopping to devise competitive strategies, it’s essential to choose the right rate shopping tool for your hotel.

Choosing the Right Rate Shopping Software for Your Hotel

Rate shopping tools enable hoteliers to monitor competitor rates, track market trends, and devise effective pricing strategies. However, with numerous options available in the market, selecting the right rate shopping tool for your hotel can be a daunting task.

To make an informed decision, hoteliers must follow this step-by-step approach to choose the right rate shopping tool for your hotel.

  1. Define Your Needs

    Start by identifying your specific requirements and objectives. Consider factors such as the number of properties you manage, the scale of your operation, the level of automation you require, and the integration capabilities with your existing systems. Clearly defining your needs will guide you in selecting a tool that aligns with your business goals.

  2. Comprehensive Competitor Coverage

    Ensure that the rate shopping tool provides comprehensive coverage of competitors across various online channels. It should be capable of monitoring rates on global distribution systems (GDS), online travel agencies (OTAs), metasearch engines, and other relevant platforms. The tool should cover a wide range of competitors to provide you with a holistic view of the market.

  3. Real-time Data and Accuracy

    Timeliness and accuracy are critical when it comes to rate shopping. Choose a tool that offers real-time data updates, ensuring that you have access to the most up-to-date market information. The tool should provide accurate rates, availability, and booking data to facilitate accurate analysis and decision-making.

  4. Customization and Reporting

    Look for a rate shopping tool that allows customization and flexibility in terms of reporting. The tool should enable you to generate customized reports tailored to your specific requirements. It should offer intuitive dashboards and visualizations to simplify data analysis and aid in deriving actionable insights.

  5. Rate Parity Monitoring

    Rate parity is crucial for maintaining a consistent pricing strategy across all distribution channels. The rate shopping tool should have rate parity monitoring capabilities, allowing you to identify any rate discrepancies and take corrective actions promptly. This ensures a fair playing field and prevents any potential revenue leakage.

  6. Integration and Compatibility

    Consider the integration capabilities of the rate shopping tool with your existing systems, such as the property management system (PMS), revenue management system (RMS), and channel management system (CMS). Seamless integration streamlines data flow and eliminates manual data entry, saving time and reducing errors.

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  7. Data Analysis and Pricing Intelligence

    Evaluate the data analysis capabilities of the rate shopping tool. It should offer advanced analytics features, such as historical data analysis, demand forecasting, and price optimization insights. These features enable you to derive actionable intelligence from the data and make informed pricing decisions.

  8. Customer Support and Training

    Choose a rate shopping tool that provides excellent customer support and training. Ensure that the vendor offers comprehensive onboarding, training sessions, and ongoing support to help you maximize the tool’s potential. Responsive customer support ensures that any technical issues or queries are addressed promptly, minimizing disruption to your operations.

  9. Scalability and Future-Readiness

    Consider the scalability of the rate shopping tool and its ability to accommodate your future needs. As your business grows, you may need to monitor rates for additional properties or expand into new markets. Choose a tool that can scale with your business and adapt to changing requirements.

  10. Cost-effectiveness

    Finally, evaluate the cost-effectiveness of the rate shopping tool. Consider the pricing structure, including setup fees, subscription fees, and any additional charges for extra features. Compare different options and choose a tool that offers the best value for your investment.

By considering these factors and conducting thorough research, you can choose the right rate shopping tool that aligns with your hotel and results in better revenue management.

How are Rate Shopping Tools related to Revenue Management?

Rate shopping tools and revenue management are closely interconnected. Revenue management involves optimizing pricing and inventory to maximize revenue. Rate shopping tools provide the data and insights necessary for effective revenue management strategies. By monitoring competitor rates, identifying market demand patterns, and analyzing historical data, you can make informed decisions on pricing, availability, and distribution channel management. The integration of rate shopping tools with your revenue management system allows for seamless coordination and alignment of pricing strategies, resulting in improved revenue performance and profitability.

By leveraging rate shopping tools effectively, you can stay informed about market trends, optimize pricing for different guest segments, implement dynamic pricing strategies, enhance rate parity, strategically position your hotel, and improve revenue management.

Invest in a reliable and comprehensive rate shopping software to gain a deep understanding of your competitors, and thrive in a highly competitive marketplace.


Which pricing strategy is positioning your hotel among the most expensive hotels? ›

Skimming Pricing Strategy: The skim strategy is to position clearly your hotel among the most expensive. Price leaders often achieve among the highest profitability.

What are the 4 pricing strategies? ›

What are the 4 major pricing strategies? Value-based, competition-based, cost-plus, and dynamic pricing are all models that are used frequently, depending on the industry and business model in question.

What is an example of pricing strategy? ›

For example, let's say you sold shoes. The shoes cost $25 to make, and you want to make a $25 profit on each sale. You'd set a price of $50, which is a markup of 100%. Cost-plus pricing is typically used by retailers who sell physical products.

What is the best available rate pricing strategy? ›

BAR is the acronym for “Best Available Rate” which is also known as BRG (Best Rate Guaranteed). Going by the terminology, it is the lowest rate for a day at which the guests can book a room. It is a pricing mechanism used by the hospitality industry to set the best room rates in line with the demand.

What is hotel value pricing strategy? ›

A value-added strategy – This means you will set your prices slightly higher than your competitors but winning guests over with more extras and add-ons to their booking. A discount strategy – Useful when you're in a low season and need to boost occupancy by discounting your base rates.

What are the 3 C's when creating an effective pricing strategy? ›

The 3 C's of Pricing Strategy

Setting prices for your brand depends on three factors: your cost to offer the product to consumers, competitors' products and pricing, and the perceived value that consumers place on your brand and product vis-a-vis the cost.

What are the three basic strategies used to determine prices? ›

The three pricing strategies are growing, skimming, and following. Grow: Setting a low price, leaving most of the value in the hands of your customers, shutting off margin from your competitors.

What are three of the basic pricing strategies and what are examples? ›

In this short guide we approach the three major and most common pricing strategies:
  • Cost-Based Pricing.
  • Value-Based Pricing.
  • Competition-Based Pricing.
Sep 19, 2017

What is pricing strategy in simple words? ›

Pricing Strategy Definition

Pricing strategies are the methods and procedures companies employ to determine the rates they charge for their goods and services. Pricing is the amount you charge for your items; pricing strategy is how you calculate that number.

What are the six common pricing strategies? ›

To help you make the right choice, below I've listed six pricing strategies in marketing to consider for your small business.
  • Price skimming. Best for: Businesses introducing brand new products or services. ...
  • Penetration pricing. ...
  • Competitive pricing. ...
  • Charm pricing. ...
  • Prestige pricing. ...
  • Loss-leader pricing.
May 27, 2021

How is pricing strategy done? ›

A pricing strategy takes into account segments, ability to pay, market conditions, competitor actions, trade margins and input costs, amongst others. It is targeted at the defined customers and against competitors.

Why is pricing strategy important? ›

Pricing portrays the value of your product. Some customers may judge low product prices as a poor quality commodity. Alternately, a high price may mean good quality but may drive away customers. Strategies of pricing help companies strike a balance and acknowledge consumers' wants.

What is target rate pricing strategy? ›

Rate of return pricing or Target-return pricing is a method of which a firm will set the price of it's product based on their desired returns on said product.

What influences hotel prices? ›

8 Things That Affect Hotel Room Value
  • Negative online reviews. No business likes getting negative online reviews. ...
  • Local competitors pricing. ...
  • Types of rooms. ...
  • Building and room cleanliness. ...
  • The hotel's location. ...
  • Access to room service. ...
  • Hotel guest and staff technology.
Jan 23, 2020

What are the 7 criteria that determine the room rate? ›

Determine your competitive set based on similar offering, amenities, price, location, size, star-rating, and target customer. A competitor analysis will also give you an idea of how your city is performing in a specific period.

How can hotels reduce cost of sales? ›

Best Cost Saving Ideas for Hotels
  1. Analyse your expenses in detail.
  2. Cross train staff for optimum resource utilization.
  3. Use technology to cut costs.
  4. Deploy self check-in kiosks.
  5. Lower electricity costs by going green.
  6. Optimize your hotel's marketing cost.
  7. Practice preventive maintenance for appliances.
Jan 2, 2023

What is Marriott clear pricing strategy based on? ›

Marriott Price/Pricing Strategy:

Marriott determines the prices of their hotels by keeping the value with quality framework satisfied and also the pricing strategy is maintained in such a way that without losing their brand name Marriott is able to maximize their revenue.

Why is pricing important in hotels? ›

Testing different pricing strategies can also help hotels to determine the impact of factors such as cancellation policy, length of stay, repeat guests, social media, and discount codes on their bookings and revenue. By adjusting their pricing based on these factors, hotels can increase revenue and boost occupancy.

What is the first step in strategic pricing? ›

The first step towards strategic pricing is to understand each level of the pyramid and how it supports those above it.

What are at least three 3 factors affecting pricing decisions? ›

The main determinants that affect the price are:
  • Product Cost.
  • The Utility and Demand.
  • The extent of Competition in the market.
  • Government and Legal Regulations.
  • Pricing Objectives.
  • Marketing Methods used.

What factors determine price and pricing strategies? ›

Here's a breakdown of the most important factors to consider when setting prices for your goods:
  • Market research. ...
  • Value. ...
  • Cost of goods. ...
  • Labor. ...
  • Distribution. ...
  • Economies of scale.

What is an example of value based pricing? ›

Value-based pricing example

Say a coffee shop, Company A, charges twice as much for a cup of coffee than their competitor, Company B. Although their prices are double what others charge for similar products, people are willing to pay more for coffee from Company A.

What is a customer based pricing strategy? ›

Customer based pricing or value based pricing is the pricing strategy based on establishing prices for products and services based on the perceived value. While measuring such value can be problematic, companies often get customer feedback to develop a value- based foundation for setting a price.

How do you tell customers about price increase examples? ›

Template #1: Quick announcement

Your satisfaction means a lot to us, and we hope we've been successful in providing you excellent customer service/products. I'm writing to let you know that due to [reasons for the price increase], we are going to be raising our prices on [product/ service].

How do you motivate customers to buy your product? ›

How to Encourage Customers to Buy Your Product
  1. Use enticing sales copy and product photos.
  2. Showcase customer reviews and testimonials.
  3. Provide opt-in special offers.
  4. Provide time-sensitive deals.
  5. Streamline your checkout page.
  6. Provide a seamless payment experience.

What factors affect prices? ›

Four Major Market Factors That Affect Price
  • Costs and Expenses.
  • Supply and Demand.
  • Consumer Perceptions.
  • Competition.

What are four common pricing objectives? ›

The four types of pricing objectives include profit-oriented pricing, competitor-based pricing, market penetration and skimming.

What is a high low pricing strategy? ›

A high-low pricing strategy is a common retail pricing strategy where a product (or service, in some cases) is introduced at a higher price point, and then gradually discounted and marked down as demand decreases.

What is markup pricing? ›

Markup pricing is a pricing strategy that involves taking the cost of a product and adding a certain percentage on top of it to set the final selling price for a product.

What is full cost pricing? ›

a pricing strategy in which all relevant variable costs and a full share of fixed costs directly attributable to the product are used in setting its selling price.

What is positioning strategy in hotel industry? ›

Hotel market positioning refers to the unique identity that your brand has created in consumers and how it is distinguished from the guest experience that your competitors offer. The better your positioning, the more likely guests are to book a room with you and become loyal, repeat customers.

Which pricing strategy involves setting a high price for luxury products? ›

What is premium pricing? Premium pricing is a strategy that involves tactically pricing your company's product higher than your immediate competition. The purpose of pricing your product at a premium is to cultivate a sense of your product's market being just that bit higher in quality than the rest.

What is a pricing strategy used when a product or service is positioned to be luxurious and elegant? ›

Price skimming is typically associated with luxury items and only works if you have a product or service that is highly valuable or perceived as highly valuable. Brands like Rolex, Mercedes-Benz, and Louboutin use a price-skimming model, and the high price reinforces their luxury perception.

What is skimming pricing strategy in hotel? ›

Price skimming is where you establish a higher rate when you launch your business, then gradually lower it over time. The main objective of this strategy is to generate a buzz around your product and promote the idea that you are offering something of high value.

What are the 5 common positioning strategies? ›

What are the 5 common positioning strategies?
  • Customer service positioning strategy.
  • Convenience-based positioning strategy.
  • Price-based positioning strategy.
  • Quality-based positioning strategy.
  • Differentiation strategy.
Aug 25, 2021

What is an example of a successful positioning strategy? ›

A great positioning strategy example would be a computer company that focuses on providing cutting edge technology at premium costs before their competitors. Another example of positioning strategy would be a large chain store that focuses on providing popular goods to many people at a low cost.

What are the 4 types of strategic positioning? ›

There are four main types of positioning strategies: competitive positioning, product positioning, situational positioning, and perceptual positioning.

What is pricing strategy strategy? ›

Pricing strategies are the methods and procedures companies employ to determine the rates they charge for their goods and services. Pricing is the amount you charge for your items; pricing strategy is how you calculate that number.

Which pricing strategy is based on customer? ›

Customer-driven pricing is a pricing strategy in which a company sets prices according to customers' perceived value of its products and services. To be effective, companies should consider how to best segment the market so that prices reflect those segments perceptions of value.

What is the pricing strategy when quality is high and price is low? ›

Penetration pricing focuses on setting an artificially low initial price, or a "special introductory offer," on a high-quality product.

What kind of pricing strategy is used by a business when they offer a lower price during the initial offering of a new product or service? ›

Penetration pricing is a marketing strategy used by businesses to attract customers to a new product or service by offering a lower price during its initial offering. The lower price helps a new product or service penetrate the market and attract customers away from competitors.

What are three pricing strategies a business can use for their product? ›

In this short guide we approach the three major and most common pricing strategies: Cost-Based Pricing. Value-Based Pricing. Competition-Based Pricing.

Which pricing strategy is usually used for a product with high brand value in which customers are willing to spend much money in? ›

Companies use a premium pricing strategy when they want to charge higher prices than their competitors for their products. The goal is to create the perception that the products must have a higher value than competing products because the prices are higher.

Which pricing strategy assumes customers will switch to a new product? ›

Penetration pricing is a pricing strategy in which the price of a product is initially set low to rapidly reach a wide fraction of the market and initiate word of mouth. The strategy works on the assumption that customers will switch to the new product because of the lower price.

What is the best example of a skimming pricing strategy? ›

Price skimming examples

Electronic products – take the Apple iPhone, for example – often utilize a price skimming strategy during the initial launch period. Then, after competitors launch rival products, i.e., the Samsung Galaxy, the price of the product drops so that the product retains a competitive advantage.

Which pricing strategy is used when a company wishes to match its competitors prices? ›

Competitive pricing—pricing your product(s) based on the prices your competitors have on the same product(s). This pricing strategy can be useful when differentiating your product from other products is difficult.


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