Rate Shopping Tools vs. Revenue Management Systems: Unlocking Success for Your Property
It’s something of an understatement to say that the accommodation industry is extremely competitive but there is one vital strategy that can help you stay ahead of the pack and maximise your properties revenue: competitor price monitoring. Fortunately, it’s not as difficult as you might imagine if you use a rate shopping tool and revenue management systems.
Larger properties usually have a Revenue department or revenue manager, but smaller properties most likely do not have the budget to hire nor do they have sufficient knowledge on revenue management themselves.
Rate shopping tools and revenue management systems are designed to bridge this gap on a fundamental aspect of your property AND if you are using a revenue management system, you will have AI doing the rate adjustments for you.
Even if you have someone looking after the revenue management, these software solutions can also drastically improve the efficiency of their day-to-day operations, allowing them more time to focus on the human areas of revenue management that these tools won’t be able to help you with.
Rate Shopping Tools - An Introduction
A rate shopping tool is a game-changing beginner-friendly solution that provides properties with real-time insights into market trends and competitor rates. By leveraging this information, properties can make informed decisions to optimise their pricing strategies and improve their overall success.
If you find yourself manually checking rates every day – a rate shopping tool can easily maximise your time and efficiency and is well worth the investment.
You can start using it straight away without any integration to a Property Management System (PMS).
We are currently collaborating with RatePing as a recommended rate shopping tool and will integrate in the future to bring even more functionalities into the ever evolving GuestPoint.
What Is A Revenue Management System (RMS)?
A revenue management system (RMS) is then basically an automated rate shopping tool that will adjust your prices on GuestPoint based on real-time data from your competitors. It is almost like hiring an artificially intelligent revenue manager for your property that can replace most of their repetitive day-to-day tasks.
If you’ve ever had a special local event announced and know you need to increase the prices on those dates, you will often find that half of your rooms have been booked out already before you even had time to increase the rates.
This is when a RMS can heavily reduce your revenue losses by automatically adjusting your prices when it notices a spike in bookings in the area. Not even a human revenue manager can do this for you. You could easily make back the money you spend on the RMS itself just by cutting down on these types of revenue losses.
This automatic adjustment is on GuestPoint itself and will work for manual direct bookings (email, phone, walk-in) and online booking platforms like your website and booking.com.
Revenue management systems require a software integration and we are currently integrating a couple of solutions with GuestPoint.
Price point and budget is something to consider as well. Revenue management systems are much more expensive than rate shopping tools. You may find that starting with a rate shopping tool is a cheaper and more beginner-friendly option.
You can always upgrade to a RMS later if you find the rate shopping tool beneficial to your property.
What is a Rate Shopping Tool?
A rate shopping tool is a software solution designed to gather and analyse pricing data from competitors in your market. These tools track rates across various channels, providing real-time updates on changes in competitor pricing, market demand, and availability. Some advanced rate shopping tools also integrate with property management systems (PMS) to streamline the decision-making process.
Key Benefits of Using a Rate Shopping Tool
- Competitive Pricing: A rate shopping tool helps you adopt a competitive pricing strategy by giving you insights into what similar properties in your area are charging. This helps you set prices that attract guests while maximising profitability.
- Market Insights: Beyond just competitor rates, rate shopping tools provide valuable data on market trends, including demand spikes, seasonal variations, and event-driven surges.
- Dynamic Pricing: With access to up-to-date data, properties can implement dynamic pricing strategies, adjusting rates in real-time to capitalize on demand and occupancy trends.
- Save Time and Effort: Manually monitoring competitor rates can be time-consuming and prone to errors. A rate shopping tool automates this process, providing accurate data at your fingertips.
- Boost Occupancy and Revenue: By optimising your pricing strategy, you can attract more bookings, improve occupancy rates, and drive revenue growth.
Rate Shopping Tool vs. Revenue Management System
While a rate shopping tool focuses on collecting and presenting data about competitor pricing and market trends, a Revenue Management System (RMS) goes a step further by offering automated recommendations and pricing strategies. Here’s a breakdown of their differences:
- Core Functionality:
- Rate Shopping Tool: Collects and displays competitor rates and market data for analysis to guide your manual price adjustments.
- Revenue Management System: Uses algorithms and data analytics to automatically update your rates to optimal prices based on multiple factors, including demand forecasts and historical data.
- Automation:
- Rate Shopping Tool: Requires manual interpretation of data to action manual pricing decisions.
- Revenue Management System: Automates pricing updates and decisions, saving time and reducing human error.
- Scope:
- Rate Shopping Tool: Primarily focuses on competitor rates and market insights.
- Revenue Management System: Offers comprehensive revenue strategies, including occupancy forecasting, rate adjustments, and distribution optimisation.
- Integration:
- Rate Shopping Tool: Does not require an integration to a PMS to start using. An integration with a PMS would enhance the visibility of the rate shopping tool itself and make it easier to action manual updates within the PMS.
- Revenue Management System: Fully integrates with PMS and other systems to provide end-to-end revenue management solutions. In our case – RMS’ require a full integration with GuestPoint to provide functionality. We are currently working with RoomPriceGenie.
- Who is it useful for?
Both solutions are useful for any levels from beginners to professional revenue managers.
We recommend starting off with a rate shopping tool if you are unsure about the AI side of a revenue management system or if the revenue management system is out of budget for your property, as they are fairly more expensive than rate shopping tools.
By understanding these differences, properties can decide whether they need the detailed insights of a rate shopping tool or the robust automation and strategy offered by a revenue management system—or both.
How GuestPoint, RatePing and RoomPriceGenie Bring Value to Your Property
At GuestPoint, we’re committed to empowering properties with innovative tools to achieve success. That’s why we’re excited to collaborate with RatePing, a leading rate shopping solution, to deliver exceptional value to our customers.
RatePing provides real-time rate insights. This partnership enables you to:
- Monitor competitor rates effortlessly.
- Implement dynamic pricing strategies with confidence.
- Enhance your revenue management capabilities.
By combining GuestPoint’s all-in-one PMS with RatePing powerful rate shopping tools, we’re helping properties like yours stay competitive and thrive in an ever-evolving market.
Once GuestPoint is integrated with RoomPriceGenie (revenue management system), you can stay competitive on a daily basis without much input and just observe your revenue being maximised in an automatic behind-the-scenes manner.
Ready to unlock the full potential of your property? Reach out to the GuestPoint team today to learn more about how RatePing can elevate your pricing strategy and drive success.
Simplify your operations, manage your revenue, and create great experiences with GuestPoint.
