At RoomPriceGenie we love data. It enables better decision-making, and it helps us to understand and react to changes in the situation.
We feel very lucky to have been given access to the data of our wonderful PMS partner, RoomRaccoon. As two ‘Room’ named companies, we were always going to feel some bond with each other, but this was definitely cemented further when we shared a stand at the Independent Hotel Show in London in October. From there came the idea of combining to write a blogpost using RoomRaccoon’s data but from RoomPriceGenie’s pricing perspective.
2022 is a difficult year to predict. What’s new? 2021 was difficult to predict. And I don’t think many people got 2020 right. So how should you approach your pricing?
For RoomPriceGenie and RoomRaccoon joint clients, none of this is a problem.
So what can we learn from the RoomRaccoon data? As I mentioned before, it has been very exciting to see it.
RoomRaccoon have 95% independent hotels that mainly focus on leisure, and in this case, mostly local leisure. They have over 1500 properties in 10 countries. You can also see from the charts below that they have an ADR (average daily rate) of around €100 on average over the year.
Let’s look at RevPAR (revenue per available room) and occupancy for the last 13 months:
Because of travel restrictions last summer, this means that they did particularly well. Compared to September 2020, the occupancy and RevPAR went up by about 20% in September 2021.
The RevPar went from a low of €7 in November 2020 to a high of €95 in August 2021, with an average of €35. Occupancy had a low of 13% and a high of 72%, with an average of 36%.
If we reverse out ADR from these numbers (which is not exact as they were on different days, but it gives an idea) we get a low of around €54 and a high of €132.
One thing to point out at this stage is that the success was not evenly distributed amongst properties. The leisure properties at the seaside or in the countryside would have done a lot better than the ones in the city. They may be having mid-90% occupancy in the summer peak season, while the city hotels may have been in the 30-40% range.
And bearing this in mind, from a pricing point of view, I would argue that the ADRs in summer were not as high as they could have been, especially in August.
Many of the hoteliers reading this will probably agree that they filled up too early last summer, because they were caught a little unaware by the high demand. Also, there may have been a reluctance to put prices up above what they consider to be ‘fair’ prices, even though the demand was there.
Another interesting finding, looking at the data, is that the weekends for leisure hotels between April and October are considerably busier than the weekends. Hoteliers should look at their weekend pricing in this period and see if they can raise prices a little on these dates.
41% of reservations in RoomRaccon come from a single OTA. I imagine you can guess which one that was. Clue: they are also a great Dutch company.
Reliance on one channel isn’t great but also sometimes it is difficult to see any alternative. We would recommend making sure that once you get the customers once through an OTA they book next time directly. Give them a members discount and try to get them on your mailing list.
More exciting is that 15% of all reservations YTD are direct booking engines. This is something to improve on by making your website a place that people want to book. There is more on this in our RoomPriceGenie academy that is free for 3 months for RoomRaccoon clients. You can learn many other revenue-increasing tips there too.
The average night per stay YTD is 2.7 nights. You can encourage longer lengths of stays by using minimum stays in higher demand periods. But do bear in mind that this reduces demand so it is best to use them for nights that are going to be full anyway, and you don’t want to charge more money. It’s a nicer way to make more revenue if you can use them to fill up nights that would have not been full otherwise (shoulder nights).
If you are not already making the most of your pricing then you will probably miss out on revenue in 2022. One great way to keep on top of everything is to use the seamless connection between RoomRaccoon and RoomPriceGenie to automate great pricing. Book a free trial here, and you can even start making money before you decide to pay.