In today’s rapidly shifting market, pricing decisions backed by solid data aren’t just helpful – they’re essential for maximizing revenue.
NB: This is an article from Lighthouse
Subscribe to our weekly newsletter and stay up to date
Make no mistake – raising and lowering rate is only one tool within the revenue management tool-box, but it is often the most crucial and effective tool that we have, so when making rate changes to our Best Available Rate, or Flexible rate, it’s very important that there is a logical reason for why we are making a change.
Here we reveal five proven data signals that clearly indicate when to confidently raise your rates. These aren’t theoretical concepts, they’re practical indicators used by top-performing hotels to capture maximum value without sacrificing occupancy.
1. Positive room night pickup
Many revenue managers start their day by heading straight to their pickup report. Pickup provides one of the most straightforward indicators. After all, if a guest is booking the room, they found that price-point acceptable.
Strong room night pickup is a telltale sign that it’s time to raise rate for a given stay-date, although not all pickup is created equal, as we’ll discuss later.
Take a look below at an upcoming stay-date, shown in Lighthouse Business Intelligence. Note that this hotel is experiencing strong 7-day pickup for a date a few weeks in the future (Wednesday the 26th).
While pickup alone doesn’t tell the complete story, let’s add context: this hotel typically sees strong corporate midweek demand and already has group business on the books.
The pickup shown in the “Pickup from” column (63 room nights) represents more than 20% of total capacity, and considering the hotel is undergoing a partial renovation and has a fair amount of rooms out of service, there are now only 59 rooms left to sell!
This date clearly demonstrates how pickup, when analyzed alongside supply constraints, sends an unmistakable signal: push rate!
:format(webp))
2. When year-over-year pace shows demand strength
Positive pace is powerful when combined with pickup, but even on its own, strong pace performance often indicates additional opportunities for raising rates.
In this context, we’ll talk about pace in terms of year-over-year pace. Below, you’ll see an interesting date shown in Lighthouse BI. The stay-date March 12th is showing strong positive pace, a positive variance of 77 room-nights, and $34 in ADR. This presents another solid signal that the hotel can push rates – the hotel is capturing more demand than it was for the same day of week last year at a higher rate!
