Hotel Competitive Intelligence: What is it, Can it Affect Your Revenue Management?
By Mike Kistner President, Chief Executive Officer & Chairman of the Board, Pegasus Solutions | April 2010
Based on the three to five billion transactions Pegasus Solutions is processing each month for more than 95,000 hotel distribution customers worldwide, leisure travelers are regaining confidence. In fact, booking volumes through the alternative distribution systems (ADS), made predominantly by leisure travelers, climbed +13.93% above 2009, +9.13% above 2008, and a staggering +33.83% above 2007 levels. Future booking data in the same channel evidenced positive growth in reservations on the books through mid-2010.
That means the bookers for your rooms are there, and continuing to come back. The question becomes, how are you going to get them?
You've realized that you need to have a good revenue manager to ensure you're selling at the right price, to the right people, at the right time. But have you provided that revenue manager with sophisticated hotel competitive intelligence tools to increase your revenue through smart analysis of your market and competitive set with historical and forward-looking data?
You need intelligence, not the day's headlines
The 24-hour news cycle has shortened the "time-to-press" of environmental events and business developments that will affect your business. A regional win for a football team may mean an immediate sell-out of your hotel in the next game's host city. A natural disaster may create demand for lodging in a nearby aid location. However, even with online news and social media, catching the potential increase/decrease in demand, timing your related revenue management decision – release the rooms, lower the rates, restrict the sale – will be impossible without receiving comprehensive, pertinent and objective facts outlining your individual market situation, and that of a selected set of your competitors.
Hotel competitive intelligence is not a monthly or a quarterly event, it is a daily science requiring careful and thorough analysis of environmental events, business developments, competitor actions, and buyer behavior to name a few. Hotel competitive intelligence identifies early risks and opportunities before they become obvious. It is the difference between widely available factual information, i.e. traditional, online and social media, and a uniquely created perspective on developments and events that yield a competitive edge. This requires immediate and actionable information.