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Your Guide to Understanding Airbnb’s Search Rank Algorithm

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Airbnb uses an algorithm to generate search results that appeal to guests. The algorithm sorts through millions of listings on Airbnb to find the right listings for each search. Guests enter search criteria, and the algorithm returns listings that reflect those criteria.

Airbnb provides a variety of filters to help guests refine search results. The algorithm considers many factors to determine how to rank search results, but some factors have a larger impact than others. In particular, the quality, popularity and price of a listing heavily influences how a listing appears in search results. Airbnb’s algorithm considers how often guests click on your listing, how often guests attempt to contact you from your listing page, and how many booking requests you accept.

If you want your listings to always outperform your market, these are some of the most important things for you to do:

Price – To determine how attractive the price of a listing is, the algorithm considers a variety of price data, including how the price compares to similar listings in the area for the given dates. Listings that are priced below other comparable listings – other listings in the area with similar guest capacity and amenities – tend to rank higher in search. Setting a competitive price can help improve your ranking because listings offering the best value in any given region tend to appear higher in search results.

Location – The location of a stay also has a large impact on how the listing appears in search results. Listings located in places that guests like to stay tend to rank higher – for example, accommodations close to popular landmarks.

Enhance your listing – Airbnb’s algorithm factors in how guests engage with your listing, when guests attempt to contact you from your listing page, and whether guests add your listing to their wish lists. If lots of guests add your listing to their wish lists, it will also rank higher, and those guests will be likely to find your listing again in future searches.

To help spark guests’ interest:

Feature a high-quality cover photo that looks inviting.
Describe the unique characteristics of your space in specific, accurate details that let guests know exactly what to expect.
Offer amenities that guests want, such as high-speed wi-fi and free parking.

5-star Reviews – One of the categories that affect search ranking is the listing details and one component of it is the number of 5-star reviews. Consider sending a message to your guests asking for honest feedback for their stay that will potentially help you become an even better Host.

Option for Instant Book – Guests often search for listings with Instant Book. Keeping your calendar up-to-date is key to using Instant Book successfully. Many hosts report that they earn more money by making the booking process easier for guests, and that they appreciate the convenience this provides. Use Instant Book so your listing appears whenever guests search for Instant Book listings in your area. Once the responses are immediate and automatic, Instant Book can also improve your ranking.

Quick Response – Respond to requests within 24 hours to help improve your ranking in search. Try to avoid repeatedly declining booking requests. Though it’s occasionally necessary to decline a booking, doing so often can negatively affect your search ranking because having reservations rejected is a poor experience for guests.

Cancellation Policies – A great way to stand out to potential guests is by offering flexible cancellation policies. Adding a new, more flexible policy or updating an existing policy to make it more accommodating can help you secure more bookings in times of low demand and high uncertainty. Airbnb’s latest data shows that hosts who switched from a strict or moderate cancellation policy to a flexible policy after April 2020 saw an increase in next-month bookings of 10% or more. Last minute bookings are also on the rise and much less likely to be cancelled. In 2021, the average cancellation rate by a guest was around 15% making Airbnb a very attractive solution for accommodation providers.

Pricing – Promotions and Discounts – Promotions are special prices that a property can offer during a certain time window, or to a certain type of bookers. Hosts can encourage travelers to book longer stays by offering a weekly or monthly discount. Hosts can encourage their guests by promoting early bird rates and last minute deals. Less than 50% of hosts offer a weekly or monthly discount, and those who do tend to get more bookings for longer stays. Also, if you add a monthly discount, your listings will be searchable by guests looking for listings for more than 28 nights.

While Airbnb marketing is an essential part of business growth, it is equally important to be visible across different channels and travel sites. RateTiger offers strong connections with over 450 OTAs and technology providers. The company provides channel management, price intelligence, connectivity solutions and centralized management platform to hotel chains, independent and boutique properties and large serviced apartment groups globally.

You can now manage your property on Airbnb via RateTiger. Contact us today to connect to Airbnb or manage your existing connection via RateTiger – https://www.erevmax.com/airbnb/#register

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What is a Good Hotel Occupancy Rate?

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Hotel Occupancy Rate is one of the Key Performance Indicators (KPI) for hoteliers as it is directly related to revenue. As a performance metric, it showcases the percentage of hotel rooms occupied and goes alongside other revenue management strategies like ADR (Average Daily Rate) and RevPAR (Revenue Per Available Room). The three terms altogether reflect the performance of the hotel, and the percentage keeps changing from season to season.

With travel booming after a break of 2 years in U.S, the hotel occupancy rate in summer 2022 is at par with pre-pandemic booking levels in April and May 2019. As per Amadeus’ Demand360, April 2022 was the first month to outcast the reservations in 2019, rising to 63% in May 2022 compared to 60% in May 2019.

In this article, we are going to have a clear understanding of what is occupancy rate for hotels, its importance, how to calculate it, and the ideal occupancy percentage.

What is Hotel Occupancy Rate?

In general terms, the hotel occupancy rate is the percentage of rooms occupied in an accommodation in comparison to the total number of rooms in the property. The occupancy rate can be calculated on a daily, weekly, monthly, or yearly basis as required. It gives the hotel owners like you an estimate of how much space is occupied during a particular period and plan your strategy accordingly.

Why is Occupancy Rate Important for Hotels?

Occupancy rate is an important KPI for hotels as it helps you understand how many rooms are booked and how many are going vacant during each season. If the number of rooms booked matches the target set then the hotel’s strategy is correct, but if the number is below the target set then, you need to readdress your distribution and pricing policy.

In an ideal world, you will aim for a 100% occupancy rate and set the room rates as high as possible to get the most of your strategy set and optimize your revenue. But this is not the story always. Hence, the occupancy rate with ADR and RevPAR is calculated to get the actual performance report.

How to Calculate Occupancy Rate?

The formula to calculate “hotel occupancy rate” is as follows:

Occupancy Rate = No. of rooms sold/ Total no. of rooms in the hotel

Let us take the example of Hotel ABC with 100 rooms. If on any day all the 100 rooms of a hotel are sold, then the occupancy rate will be 100%. If on a particular day in June only 60 rooms are sold, then the occupancy rate will be 60%. From where did this percentage come? Let’s see:

Total no. of rooms = 100

Case 1

No. of Rooms Sold = 100

Occupancy rate = 100/100 = 1 or 100%

Case 2

No. of Rooms Sold = 60

Occupancy rate = 60/100 = 0.6 or 60%

This was occupancy rate calculation on a per-day basis. If you are to calculate the weekly occupancy rate or average rate per week, then add the number of rooms sold each day for 7 days, divide the sum by 7 and then divide the result by the total number of available rooms for sale in the hotel and multiply the result by 100 to get the percentage. Sounds confusing?

Let’s take the example of Hotel ABC for a week in June:

No. of rooms sold in a week

Monday	Tuesday	Wednesday	Thursday	Friday	Saturday	Sunday
60	54	72	60	82	95	95

Total no. of rooms sold = 518 rooms

Average no. of rooms sold = 518/7 = 74

Weekly occupancy rate = 74/100 = 0.74 or 74%

The weekly occupancy rate will of course vary from week to week depending on the number of rooms sold. But this data will give you an idea of how your hotel is performing week over week and how your sales will fluctuate during different times of the year.

Important note: It is customary to subtract the rooms that are out of order or under renovation from the “total number of rooms” while calculating the occupancy rate.

Is Your Hotel Occupancy Rate Good?

From a general perception, a good occupancy rate will of course be 100% and that should be the target of every hotelier. But it is not always so. There are instances when even with 100% occupancy you aren’t earning maximum revenue and hotels are happy with less occupancy but more revenue. After all, the end goal for every business is revenue maximization.

The ideal occupancy rate varies from hotel to hotel. For some, it can be between a range of 70-95%, though the best occupancy rate may depend on multiple factors like the hotel’s location, no. of rooms, room rates, service, etc.

From an occupancy point of view, if Hotel ABC sells all rooms everyday and has a 100% occupancy rate, it is awesome. But in this case, they might be losing out on revenue that they could have earned by selling fewer rooms at a higher price.

From the revenue point of view, selling 100 rooms means the electricity cost, cleaning cost, laundry cost, and other variable costs for 100 rooms. Suppose 1 staff caters to 8 rooms, then for 100 rooms you need 12.5 staff which isn’t practically possible, so Hotel ABC will have to hire 13 staff. It will be in the best interest of the hotel to sell 96 rooms. Plus, if any guest isn’t happy with their room or there is some problem in any room, they will have an extra room to offer to them and win their loyalty.

Takeaway

The best occupancy rate for your hotel is the level at which your NRevPAR is maximum. It is the key indicator of the hotel’s historic, real-time, and future performance and should be measured against average daily rate and revenue per room to find the ideal occupancy percentage for your hotel.

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Top Summer Travel Trends to Look for in North America in 2022

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After two years of restrictions and uncertainties, Americans are all set to hit the road this summer. Returning to pre-pandemic levels, WTTC (World Travel & Tourism Council) projected United States’ travel industry to contribute a sum of $2 trillion to the U.S economy in the year 2022.

While rising oil prices, inflation, and the economy are concerns for a significant number of travelers, multiple surveys on travel sentiments show an increase in travel spending in the next 12 months. With revenge travel firmly setting in, people are looking forward to creating experiences with renewed focus on sustainable leisure tourism. Pandemic affected travelers are looking forward to engage more in experiences on their trip like wellness activities, environmental programs and other activities that is to bring travelers from different areas together.

Flexibility is the Winner

As per a recent market study by the American Express, this year 74% of the citizens are to book a trip irrespective of the fact that they might need to modify it. However, safety and health remain paramount to most travelers. Hence, flexibility and brand trust have remained key considerations for accommodation booking.

Hotels need to continue assuring guests of greater flexibility and options while also offering safe, meaningful experiences to be appealing to travelers which can lead to an acceleration in revenue recovery.

Turn Guests to Brand Advocates

Let’s be real – some travelers are still wary. They still want to avoid social gatherings and the crowd. They need reassurance – and who would be better than those who already experienced your hospitality? Find out your most engaging and enthusiastic guests and encourage them to share their experiences.

Corporate Travel is On a Rise

In the present time, the organizations have been thinking and reconsidering the future of work including the role of business travel. While companies are bringing back their employees to the office, they are also planning gatherings and in-person meetings with colleagues and customers. Corporate travel is experiencing a steady rise this year with the spending on business travel projected to reach 36% of that of 2019 in Q2 2022, and 55% by the end of the year.

1 out of every 4 companies is claiming that the frequency of corporate travel is soon going to exceed pre-pandemic levels, with Europe leading the list of destinations for US-based corporate travelers. According to Business Travel News, second-tier cities have shown a faster and sturdy hotel rate recovery than most of the major getaways for both domestic and international business travel. For years, business travelers have remained one of your most loyal guests. Connect with them to make their stay as comfortable and welcoming as possible so they keep coming back.

Evolution of Family Travel

With hotels and Airbnb’s offering flexible cancellation policies, families are planning trips much in advance. Where only 44% of families took a vacation in 2020, 79% of travelers agreed that they are looking forward to traveling with their families in 2022. 81% of parents say that the pandemic has changed how they think about planning vacations with their children.

According to American Express, 70% of surveyed parents are planning their first international trip after pandemic with full family this year. Families are reprioritizing values by spending more time with their loved ones. Making new memories, reconnecting, and reengaging, travelers traveling with families are paying more attention to safety and health considerations.

Events & Gathering are A Major Interest in 2022

The change in lifestyle post-pandemic has also brought a change in the travel pattern. Travelers are looking for experiential travel – spending more on creating memories. With the return of music festivals, sports, and cultural events, there has been a substantial rise in bookings for specific entertainment events.

56% of travelers, who had to hold off their travel for major entertainment events last year say that they plan to return to these events this year. Over 52% of guests stated they are interested more in traveling for weddings, birthdays, graduations, or holidays this year. Adapting and evolving according to the needs of travelers has become a crucial need for hotels.

Workation Continues to Progress

Workation has been the latest travel trend after the pandemic made its entry where a hybrid setup is ruling since mid of 2020. A growing number of travelers are looking for a peaceful blend of working remotely while on a vacation. 81% of Americans say they grew more creative at work after taking a workation. Whereas 94% of employees are planning a workation in 2022 to recharge their mental and emotional batteries.

During the early months of pandemic, 92% of organizations suspended business travel, while workation started gaining momentum after the end of lockdown and the declining effects of pandemic. Among those opting for workation, 63% make sure to check the health and safety standards of the property. Another 63% of the traveler’s main concern is if the accommodation has a reliable internet connection or not.

Creating a work-friendly environment for their guests is going to be beneficial for the hotel owners this year in 2022 and years to come.

Travelers Demand for Transparency & Flexibility

Though travel industry is recovering, travelers are still hesitant to travel but not from the lack of want. Beyond health, travelers are also facing financial uncertainties. With the world being unstable, travelers are scared to risk the cancellation fees. According to Travel Daily News, 55% of travelers rated cancellation flexibility as the benefit that would give them the greatest sense of security and be better prepared to travel in 2022.

Guests feel more secure when accommodation providers are transparent about their booking policies and are flexible with cancellation policies. With flexible cancellations and assurance of guarantee in uncertain times, more travelers are booking trips this summer that they are free to modify/ cancel according to their needs.

2022 is the year of reconnecting and rebuilding! With more opportunities, travelers are looking forward to going back to what they love most. It is hence important for accommodation providers to keep evolving and innovating alongside the changing needs of travelers.

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Importance of Rate Parity in 2022 and Beyond

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In this digital age of hyper-transparency, hotels are expected to maintain price transparency across online sales channels for travelers. While the dynamic pricing means the acceptable value offered by a given room rate for a day stay by a property would vary based on demand, hotel rate parity ensures practice of maintaining consistent prices across all channels of distribution.

FYI: Customers are much savvier in this tech world.

With Metasearch platforms aggregating rates from various distribution channels, it has become rather easy for travellers to compare price of a hotel across websites. So, why will a traveller book from a site when she/ he can find a better price on any other site or hotel’s own website? This way you will be restricting your sales channel and even the channel owner wouldn’t be interested in listing your property if you aren’t giving them the best price. Agreed? With 82% of the travel booking taking place online, would you like to take this chance?

What is Rate Parity?

Hotel rate parity in the hospitality industry is the process of maintaining the same rate for the same room type across all distribution channels. In simple terms, if the quoted price of the room is same on all third-party-channels and hotel’s website, then it is said to be in parity.

If the price differs across different channels or if the price listed on OTAs is higher than the price on hotel’s website, then there is disparity.

For example, if you are selling your Super-Deluxe room for $150 over the weekend on your brand site and $160 on OTAs for the same room type, then you’re violating rate parity. On the other hand, if your price remains the same on all sales channels – direct as well as on OTAs and metasearch channels – you are in parity.

Is Rate Parity Legal?

Yes, hotel rate parity is a common legal agreement between the hotel owners and the online travel agencies to maintain consistent room rates across all distribution channels. This clause has been legalised in many countries.

The 2 Basic Problems of Rate Disparity

Hotels tend to lose on direct bookings by sending the customer to third party channels with lower rates and paying higher commission. Thereby, bringing lower revenue to their table.
Customers tend to lose their trust in hotels quoting different rates on different platforms giving rise to confusion and losing confidence in the hotel’s viability. Thereby, affecting the brand value of the hotel.

Understanding the Importance of Rate Parity

It’s true that direct bookings from (brand.com) bring the maximum revenue to a hotel as compared to any OTA. Reason being the hotel doesn’t need to pay any commission for it. But, can a hotel only rely on its website for bookings in the current time when OTA bookings are one of the major sources of online hotel bookings? Having a presence on online sales channels is as important as to having its own website. It is your gateway to hotel marketing and reaching the maximum customers looking for a hotel in your region.

Online Travel Agencies have different clauses and charge differently. Depending on the commission rate, hotel’s revenue per sold room may change. For OTAs, rate parity has remained an effective tool to ensure that the hotels will not give any discounts to the customers to woo them to book direct. On the flip side, this takes away the hotel’s key weapon to attract direct bookings.

For the hotel all are indirect sites and it has to pay charges for bookings to both though more or less. It’s clear that direct booking is the biggest source of advantage. So, why favour one site over the other? Take the straight road and maintaining rate parity across all your third-party distribution channels gear the customers towards direct booking from your brand.com.

Why is Rate Parity Important for Hotels?

Maintaining the same rate across all sites, hotels enjoy the trust and confidence of the travellers.
Hotels maintain the same reputation with different OTAs and are able to extract the plus point of every channel.
It helps the hotel travel around the right market mix with a perfect blend of direct and indirect channels.
Hotels can avail the undue advantage of direct bookings by pushing travellers towards their website by offering more values than OTAs in terms of add-on services.

Why is Rate Parity Important for Travelers?

It gives the customers a clear picture of the hotel’s price.
It helps them chose their booking source by maintaining consistency.
It removes any confusion prevailing in the customer’s mind.

Rate Parity Strategies to Drive Direct Bookings

Now when your hotel is having the same price across all direct and indirect sales channels, let’s see how you can bring in more direct bookings to turn the situation to your advantage.

Create a plan of action to out value the commission loss on indirect bookings by having a market mix.
Offer add-on services on your website like free Wi-Fi, free parking, early check-in, etc. giving the customer reasons to book directly without affecting the actual room rate.
Make the booking process on your website simple and easy avoiding any technical glitch.
Target specific customers like corporate travellers by giving them extra discounts/ offers via email marketing or on call services.
Leverage your presence on Metasearch sites making the most of their business model of CPC on listing your hotel and directing the customer to your booking engine when they click to book.
International travellers always have a longer stay, so attract international travellers by making your presence on OTAs/ Metasearch most used in those regions from where you have the maximum international guests.

Undoubtedly, rate parity comes with many challenges. But customer trust is one of the prime requirements to sustain in the hospitality industry which rate parity gives you. However, by setting up a defined plan with a perfect mix of the right business partners, distribution channels and market trends; you can optimize your revenue by maintaining rate parity with rate shopping software like Rate Shopper by RateTiger.

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Improve Your Hotel Ranking on Booking.com with the Genius Program

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With travel demand picking up, there is a lot of competition among hotels to get in front of the guests. Are you looking to grow your reservations through Booking.com?

Boost your property’s visibility on the channel. Join Booking.com Genius Program – an exclusive loyalty program which brings partner hotels and frequent bookers closer.

Get an introductory 20% commission discount on all Genius-rate stays completed before the end of September. Sign-up to avail this exciting offer before end of June.

According to Booking.com data, on average, partners who join Genius see an increase of 70% in search result views.

Grow Your Business with Genius:

Genius partners increase bookings by an average of 45% and revenue by an average 40%.
75% of Genius customers start their booking journey with a direct visit to Booking.com or via a Booking.com partner, so you’re less likely to acquire them elsewhere.
On average, Genius customers spend 15% more and book up to two times further in advance.

Hotels taking part in the Genius program gets a special Genius tag, ranking boost and better visibility in search results on Booking.com which helps in getting more bookings faster.

The property is displayed to a select group of customers who travel more often, book further in advance, and spend more when booking. Hotels can always check their eligibility on the booking.com extranet.

Don’t miss out on this opportunity. Join before the end of June to unlock your 20% commission discount and find out how Genius can help grow your business. You can always opt out later if you change your mind or if it does not work for you.

Join Booking.com Genius Program Today

For any enquiries related to connectivity, rate shopping or direct booking solutions, please contact us – https://ratetiger.com/contact/

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RateTiger expands Partner Ecosystem with CHECK24, HappyEasyGo & Rehlat

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Guests are travelling with a vengeance. Hotels need to be in the forefront across multiple customer touch point to ensure proper visibility for their brand. The ground rule of working with any distribution/sales channel is to ensure that you keep your hotel listing up-to-date to give a true picture to the guests.

Knowing the right channels that bring business to your city and being connected to them is very important to increase your hotel’s presence online. RateTiger, the leader in hotel distribution technology, continues to partner with travel channels, booking engine providers and other tech companies to provide hotels with maximum connectivity options to choose from.

If you are looking to connect to any specific tech partner or a channel, do explore the RateTiger Partner List of 450+ distribution and tech providers. For any queries or channel addition request, contact us on – https://ratetiger.com/contact/

CHECK24

CHECK24 is Germany’s largest comparison & the second largest travel portal which offers customers the opportunity to compare a wide range of products and services – including city breaks, holidays and suitable accommodation. The CHECK24 hotel comparison offers over 1,000,000 accommodations in more than 80,000 travel destinations. Their customer program reaches more than 15 million registered customers in Germany. You can now manage CHECK24 directly from your RateTiger interface.

HappyEasyGo

Is India a big source market for your property? Connect to HappyEasyGo and get visibility to over 10 million Indian travellers. HappyEasyGo is one of India’s leading online travel aggregators. It offers domestic and international flight tickets along with thousands of hotels across India. Budget properties, lush resorts as well as 5-star hotels, HappyEasyGo has something for everyone. Get your property listed with HappyEasyGo to attract domestic bookings in India.

Rehlat

If you are looking to expand into the Middle East market, do consider adding Rehlat to your channel network. One of the leading OTAs in the region, Rehlat enlists more that 1 million hotels and has been trusted by over 500,000 travellers for bookings. It brings a carefully curated list of destinations for travellers to have a “travelastic” time with a localized payment system, offering the best possible vacation. If you would like to connect to Rehlat, contact us today.

Are you looking for a connectivity provider or a hotel channel manager software. Contact us today.

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What Is Hotel RevPAR & Why Should It Be on Your Focus List

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If you are from the hospitality industry then you must have come across acronyms like RevPAR and ADR almost daily or rather every hour. I don’t need to tell you that RevPAR stands for Revenue Per Available Room or ADR stands for Average Daily Rate. However, if you are still struggling with the difference between the two or which one to give more importance or why is everyone speaking about focusing on RevPAR to boost their hotel revenue, then we have a cheat sheet just for you.

In this blog, we are going to discuss about what is RevPAR, its calculation and why it is essential for revenue management.

What is hotel RevPAR?
How to calculate RevPAR?
Understanding RevPAR in Real Sense
Significance of RevPAR

What is Hotel RevPAR?

RevPAR (Revenue Per Available Room) is a KPI used in the hotel industry to assess the performance of the hotel. It shows the revenue generated per room. Combining occupancy rate and Average Daily Rate, RevPAR gives the hotelier a true picture of the hotel’s performance.

It is an important way of analyzing and drawing the correct balance between occupancy, pricing and overall revenue that has a substantial impact on your hotel’s success.

It is that performance indicator that helps the hotel understand whether it is making a profit or not by looking at a single figure and taking action accordingly.

How to calculate RevPAR?

For calculating the RevPAR, 4 essential information are needed:

ADR (Average Daily Rate) – Total revenue generated/ No. of rooms sold
Occupancy Rate – (Total number of rooms sold/ Total number of rooms) X 100
Total revenue generated – Room price X No. of rooms sold (it is the total income generated by selling different room types)
Total rooms available

Once you’ve the above-mentioned information at your fingertips, you’re all set to calculate your RevPAR. Let’s see the two RevPAR formulas:

RevPAR = ADR X Occupancy rate (this uses the 1^st two data terms)
RevPAR = Total rooms revenue/ total number of rooms (this uses the last 2 data terms)

Key Note: ADR is calculated on the basis of number of rooms sold and RevPAR is calculated on the basis of total rooms in the hotel.

Understanding RevPAR in Real Sense

To have a clear understanding of how is RevPAR calculated, let’s take a hypothetical example.

For example, you have a hotel with 10 rooms: 5 standard double rooms priced at $100 and 5 deluxe rooms priced at $200.

Scenario 1:

All 10 rooms are sold, which means the occupancy rate is 100%

Total revenue generated = (100*5) + (200*5) = $1500

ADR = 1500/10 = $150

RevPAR = 150*100% = $150

At 100% occupancy rate, RevPAR is same as ADR because as all the rooms are sold, revenue per room will be same as the average room rate. It means that the hotel is generating the expected profit and is in a good position.

Scenario 2:

The hotel has received a booking for 4 standard double rooms and 3 deluxe rooms, i.e., 7 rooms in total. In this case, the occupancy rate is 70% (7/10 *100).

Total revenue generated = (4*100) + (3*200) = $1000

ADR = 1000/7 = $143

RevPAR = 143*70% = $100

Now, when RevPAR is below ADR the hotel operator may decide to reduce the room rates to increase the occupancy which might in turn increase the RevPAR too. But, in case the hotel RevPAR goes down then it means the strategy isn’t working.

This shows that there is an indirect correlation between the average daily rate and occupancy rate. Both of them go vice-verse and have their individual impact on RevPAR.

Significance of RevPAR

In simple terms, RevPAR is the revenue generated for every night for the total number of rooms, irrespective of whether it is booked or not. It gives a clear measurement of the hotel’s average daily revenue earned and scope of improvements to fill the unsold rooms reflecting the pain points.

It gives you the answers to 3 main questions that have a big impact on your profit:

Are your room rates rightly priced?

Right pricing is the strategy that gets you the maximum revenue in hand. But, how do you know if the price set is right or wrong? The price depends on a variety of factors like customer demand, trends, season, etc. The price at which the net revenue per night is the highest is the right price for the room type irrespective of the occupancy rate.

Did you just underprice your rooms to increase occupancy?

There are instances when the hoteliers reduce their room rates to meet the targeted occupancy. But it is a sheer loss for you if at the end of the day the net revenue goes negative. Remember: more bookings mean more room service costs. Hence, NRevPAR (Net Revenue Per Available Room) plays an important role in this scenario to get an overview of your performance.

Which room type is your major bank and which is your loan?

It’s a known fact that all your rooms won’t perform the same. You can calculate RevPAR based on the room types to understand which room type brings in more revenue and which is draining your money in case you are making a loss on any particular room type. This figure will give you a hack of your pain points and how to turn them into happy rooms.

Though RevPAR is not the whole and sole of revenue management, it gives you a clear picture of your hotel’s performance and profit generation. At the end, the ultimate goal is profit maximization for every hotel big/ small. And hotel RevPAR is a good indicator of your financial and hotel growth.

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Revenue Management in the time of Mega Events: A Checklist for Middle East Hoteliers

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2022 has been a year of mega events for the Middle East. From sporting championships to international expo the region is hosting some of the biggest events in the world and the hospitality industry is banking on that for full recovery. Stepping into 2022 with the on-going Dubai Expo, the hotels have witnessed an increase of more than 90% in hotel bookings for the first time ever since 2007. This was just the beginning for the region with Middle East to host multiple mega and sporting events further this year.

With international travel restrictions being lifted and mega events taking place, UAE has again become a hot spot for travel with over 2.7 million overnight visitors in Q1, 2022. Hospitality events like ATM Dubai, HITEC Dubai, and others have started driving the industry experts from all corners of the world to Middle East. The positive sentiment is seen across the region as the Middle East is expected to be the first region to reach pre-pandemic level.

While cultural festivals and events of Middle East is always a treat to watch, the region is all set to host a few of the biggest sporting events this year. Whether you are a tennis or football or cricket or golf or horse racing lover, the region has tournaments and matches for all of you this year. Sports lovers from all around the world have already started planning their trip to Qatar for the most awaited sporting event of the year.

With so much to experience and considering the zeal among people the demand for hotel room bookings in Middle East in 2022 is expected to take a super high jump this year. But, the question is: “Are the hoteliers of the region ready to welcome guests from all around the world?”

Are the Middle East Hoteliers Ready to Face the Rush?

The mega events are expected to attract travellers from all regions and to bring a huge leap to the travel and tourism economy of Middle East. More travellers mean more room bookings. So, how are the hotels preparing themselves to welcome this revenue?

Are you planning to earn once for all by following the Super Surge model of Uber by irrationally increasing your room rates? Or you are planning to make the most of it by following the hotel dynamic pricing model and earning goodwill, customer loyalty and revenue for now and always?

What is Hotel Dynamic Pricing Model?

Hotel dynamic pricing is a strategy used by the hotel revenue managers to increase revenue by ensuring maximum occupancy during all time of the year, irrespective of high or low season. The concept behind dynamic pricing is that no room should go unsold even during off-season, nor to over exploit your customers during peak season. This model is a combination of customer demand and true value of the room.

Thanks to the competitive benchmarking tools available in the marketplace, most hotels now monitor real-time online rate performance and see how they can change their prices more frequently to increase revenue. It allows you to optimize your pricing strategy based on room availability, demand, loyalty and customer behavior for long- term returns.

Better Go Transparent than Lose Customers!

With increasing customer awareness, options available and rate transparency; it is always important to ensure the customers do not feel exploited. You are always free to multiply your room prices by 2x or as much you want to make the maximum during a season. But, history says that this might be your last season or worse you might end up getting no bookings even during this season.

With rate getting more transparent, hotels are moving away from pricing only approach, and including availability, loyalty and personalization in their revenue management process. While there is always a provocation to get the most in a super event like royal wedding, there needs to be more strategy behind these rates to better align them with customer expectations, which in long run helps build better relationships with potential customers.

Therefore, it is always a smart choice to go transparent and dynamic by already setting a high end and low end cap for your rooms and considering competitive rates in your revenue management process.

Now when you know what to do, the next question is how to do it? Hotel Rate Shopping tool is the answer to your question.

Why is Hotel Rate Shopping Important for UAE Hotels?

Business Intelligence and Data Analytics is the bread and butter of the current day business world! So, is the same for the hospitality industry. Hotels need to segment their customers, forecast the demand, have an optimal pricing strategy integrated against each room, their room rates must be in line with the industry rates, keep a tab on competitor pricing and so on. Hotel rate shopping is the mechanism to do all of it and Hotel Rate Shopper is the tool that helps you set the best room rates.

Now when UAE hotels have already started welcoming corporate and leisure travelers from around the world, it’s the best time to strategize your pricing decisions. This is when you need a rate shopping tool like RateTiger Shopper to bring value of the data collected rather than simply looking at it. Let’s see how a rate shopping tool brings value out of data:

Data Parity: Distorted data or different data across different OTAs can get you to lose the booking within seconds with the customer thinking your hotel to be unreliable. The biggest asset of this tool is that it brings all data from all your sales channels together under one dashboard to help you maintain data parity.

Competitor Monitoring: Gone are the days when Uber’s surge charge model could make you the king. Along with your data, it helps you keep a track on competitor pricing for different rooms across different channels to know where you outperform your competitor and to make it your USP or know which rooms of yours need more work.

Room Mapping: Have an apple to apple comparison of some specific room types of your and your competitors to get a clear insight of why is there room priced differently from yours and what should be your next move. You can also compare the same room types for different competitors.

Data Integration: Integrate Rate Shopper by RateTiger with your hotel’s PMS to monitor the data changes and data history for better decision making.

Demand Forecasting: With 2022 calling for mega events, it is essential for the hoteliers of the region to forecast the local market needs and better anticipate their pricing strategies accordingly. Effective forecasting on the major events and the regular days is your key to solid revenue management.

While rate shopping may seem to be a price determination strategy, it is your gateway to revenue maximization and maximum bookings. It provides the revenue managers with the vital market insights to set their room rates accordingly and the marketing managers with the demand forecasts to market the room types and plans as per the market trend.

Takeaway:

For a long time, hotel revenue management was all about looking into the historical data for forecasting. Pandemic changed that. Faced with the challenge of doing more with less, revenue managers are now going back to basics by focusing on the demand in the market and the pace and booking patterns in their hotels. Travellers have new set of priorities – which is pushing the industry to accept a more dynamic approach, not limited to just rates and occupancy.

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Three things guests are looking for from their hotel accommodation in 2022

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Since the start of the pandemic, hotel stays have been few and far between for millions of people around the world who have endured lockdowns and travel restrictions. Now, with the world opening its doors to travelers once again, what are guests demanding from hotels as we collectively contend with the lasting impacts of the pandemic?

Not only do hotels need to consider how COVID-19 has changed the way we travel, but they also need to take into account other modern issues, as well as the latest trends in the way people travel.

Here are three things that guests will be looking for from their hotel stays in 2022.

1. Smart In-Room Devices

Smart technology is being used more commonly in homes across the world, as people seek modern solutions to minimize the stress of home life. With guests looking for home comforts from their hotel stays, incorporating smart devices into the rooms can go a long way to helping enhance guest comfortability. Examples include smart thermostats or lighting, which can be controlled via a mobile app for added convenience, or even voice assistants that could act as a telephone and much more.

Not only do smart devices have the power to improve guests’ comfort and all-round experience, but they can also be used to help make more eco-friendly choices. Sustainable travel is a hot topic just now, and hotels have a responsibility to offer more eco-friendly stays for their guests. Using smart devices makes it easier to track energy usage, and limit wastage, both for guests and the hotel.

2. Refundable Rates

The demand for refundable rates is nothing new, but with the unpredictability of Covid-19 still very much at the forefront of people’s thinking, there are more calls for it than ever before. Though the world is starting to slowly find its feet again after the pandemic years, there is still some uncertainty around travel plans, and guests will be seeking comfort in flexible booking policies.

Of course, cancellations, particularly at short notice, can present a challenge to hotel owners who are looking to fill their booking sheets and maximize profits. To mitigate the potential impacts of last-minute cancellations, you might want to consider different strategies to retain the booking in a different guise. For instance, you could offer gift vouchers on future bookings, perhaps with an added incentive to ensure you retain their custom.

3. An ‘Airbnb’ Experience

Short-term holiday rental bookings have skyrocketed in recent years, with companies like Airbnb and Vrbo reaping the benefits of this trend. In response, hotels are adopting the processes that make this style of accommodation popular, to attract more guests in the post-pandemic era.

Research reveals that the biggest reason for customers choosing to stay in short-term rental properties instead of hotels is the added privacy they can provide. Part of the appeal of these properties is the lack of contact that’s required with the owners, which has been particularly important during the pandemic. Contactless check-in and other automated services are catering to this demand, which is likely to remain a feature of the industry going forward.

To Sum Up

The hospitality industry is always evolving, and has to constantly be looking for ways to accommodate guests’ latest wants and needs if it wants to remain competitive. As we’ve discussed, it’s likely that hotels will need to combine innovative uses of modern technology with changes to booking policies to help meet consumer demands in 2022. Both from a personal comfort perspective and in response to the climate crisis, incorporating the latest technologies throughout the accommodation will go a long way to satisfying the modern hotel guest.

“Geoff is a freelance content producer and researcher from Plymouth, MA. Apart from his projects, he also attends different conferences and events on business marketing, sustainability, travel, and safety.”
About Author | Geoffrey Aldis

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Top 5 trends in online travel booking in Middle East in 2022

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Middle East is one of the first regions to recover from the pandemic. The region has been witnessing an outstanding growth in tourism. While the pandemic had hit a hard blow to this flourishing economy and there was a drastic drop in bookings, thanks to corporate demand, including meetings, incentives, conferences and events, Middle East hotels have recovered very well compared to other global destinations. Mega events like Dubai Expo 2020 and the football championship are expected to drive a major influx in demand as well as deliver a beneficial ‘halo effect’ for the surrounding markets.

The pandemic influenced everything: not just the travel business or a country’s economy but also traveller’s demand pattern. This has brought a change in people’s choice of venue, hotel bookings and travel behavior. Irrespective of experiencing a 64% decline in travel demand in 2020, Middle East is expected to bounce back to pre-pandemic levels or better by 2023.

Before seeing the trends in online travel booking in Middle East in 2022, let us have a quick glance at the top destinations in the region.

Top Tourist Places to Visit in the Middle East
Middle East has always been a tourist hub especially Dubai. We have shortlisted the best places to include in your itinerary:
• Dubai
• Abu Dhabi
• Amman
• Petra
• Istanbul
• Doha
• Riyadh
• Jeddah
• Mecca
• Medina

The Influx of Tourist to the Middle East: Back to Tourism & Business
With international borders opening and ATM Dubai taking place in the second week of May, the Middle East tourism industry is pacing up. The percentage of travellers planning their visit to Dubai and Saudi Arabia has already taken flight.

As per the World Travel and Tourism Council’s report, before the pandemic, Middle East’s travel and tourism industry’s contribution to the economy was $270 billion, i.e. 8.9% of the total economy output.

With travel restrictions slowly being removed and the world getting ready to explore the rich heritage, Middle East is all set to welcome tourists and business travellers. Saudi Arabia, the hub of oil is expected to attract business travellers from all over the world once again. The WTTC predicts a year-on-year increase of 28% in 2022 in the Middle East travel sector.

But this time the travel trends have changed and so has the online booking trends.

Top 5 Trends in Online Travel Bookings in Middle East

Escapism Travel
With “work from home” becoming the new normal and majority of the companies working on this model, the concept of “escapism travel” is flourishing. This allows people to work from anywhere they want. People are looking towards getting out of their cities and travelling to different destinations to explore new places, experience rich heritage and embrace nature while working remotely.

Combining weekend getaways with short trips to nearby destinations has increased the number of domestic travellers. Considering the uncertainties of the market and the increasing desire to travel, last minute hotel bookings are pacing up. Speaking of last minute travel plans, Google is the first stop a traveller visits. Having your hotel listed on Google increases your chance to pull-in a booking. Running an ad with special offers for last minute bookings on GHA is like icing on the top for your property.

Calling the Corporate Travellers
Middle East: the hub of business travel has started welcoming corporate travellers from all around the world. Global Business Traveller Association (GBTA) anticipates a 32% rise in corporate travel spending in 2022. Business travel is once again going to be in the spotlight this year after having outstripped leisure travel in late 2021.

While business owners are all set to explore travel opportunities at Arabian Travel Market (ATM), India remains the key-source market for GCC’s travel and tourism economy with Russia ranking to be the second-largest source market.

Corporate travellers demand for elite bookings and services. Hence, they often prefer booking directly via the hotel’s website. This is your chance to attract this high-spending audience by showcasing high-quality videos and images of your property, rooms, amenities etc. Highlighting your property in its true form with genuine details increases your chance to bring direct bookings to your table.

Accelerated Demand for Flexibility
Since pandemic nothing is sure shot. We don’t know what will happen next and how our coming days will turn out to be. In such a scenario, travellers look for flexible booking options. Travellers might extend their stay into a staycation or there can be chances to reschedule the booking or worse cancel the room bookings.

In such a scenario, both the domestic and international travellers prefer booking their stay at those hotels or properties that offer flexible booking options. Trend shows that hotels offering free cancellations and date change options in Middle East are witnessing the maximum bookings since the third quarter of 2021 and so on.

For hotels to easily manage guest bookings, modifications and cancellations from different sales channels including the brand website and integrate it directly into their PMS, they should connect to a good hotel channel manager.

Boost Your Presence with Digital Marketing
Pacing up with the demand for luxury hotels, a total of 32,621 hotel rooms are under construction in Saudi Arabia. With new hotels coming up and cut-throat competition in the market, digital marketing is one of the best ways to reach your visitors.

The trend for digitalization has made it essential for hotels to have an online presence on social channels like Facebook, Instagram, Twitter, and so on. Facebook groups and Instagram influencers trigger the traveller’s decision these days.

Data-driven decision making is flourishing! People tend to check hotel ratings and rankings before making any reservation. With a mobile app, you can give the customers the advantage of contactless services from bookings to payments to room service and much more. Collect post-stay reviews to build your reputation and attract new bookings.

It’s time to maximize the use of digital technology to cater to guests at your property and create a valuable reposition.

Longer Stays & Sustainability
With minimum travel instances for the past 2 years, guests are seen extending their travel plans. Being the home to the oil reserves of the world and major companies, every year Middle East welcomes a high percentage of business travellers. The desire towards exploring more and embracing the heritage of Middle East is the reason for longer stays. After all who doesn’t love beauty? Coming to prolonged stays, travellers prefer extending their stay by directly getting in touch with the hotel or from the hotel’s website.

This trend of longer sustainable stays is expected to continue flourishing in 2022 and beyond!

With the travel restrictions lifting up, the region is all set to welcome travellers from all corners of the world. This roadmap of recovery calls for digitalization and trends to deliver safe, satisfactory, and contactless service. 2022 is growing to be a promising year for the Middle East travel and tourism sector.

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