How to price your rooms against your competitors
Guests rarely look at one hotel. They compare a few nearby on price, rating and place, and Google labels a price a good deal by setting it beside similar hotels in the area. Pricing against your competitors means choosing the handful of hotels guests really weigh you against, reading their prices for each coming night as a guest sees them, and deciding where you sit among them. It doesn't mean matching the cheapest.
Also called: competitive set pricing, compset, competitor rate shopping, market-based pricing.
A OneHorizyn guide. Updated .
Choose the hotels guests compare you with
Four to eight hotels is enough. Choose the ones a guest who looks at you would also look at, not the best-known hotel in town:
- Near you, or near what your guests come for: the same business district, beach or temple.
- Of a similar kind and class, with ratings like yours.
- Shown beside you on Google's map and in the booking sites' lists when you search your own area.
- Named in your reviews. A guest who writes that they also looked at another hotel has told you who you compete with.
Keep the same list for months, so that this week's prices can be set beside last month's.
Read their prices the way a guest sees them
- 1On Google, search for hotels in your town for one night, one room and two adults, and find each competitor in the list. The price Google shows for each hotel there is the lowest any site offers for it.
- 2Do it for the nights you are pricing: the next fortnight, then a weekend and a busy date further out.
- 3Note each competitor's price and yours, tax in or out on both, in a sheet with a row for each night.
- 4Note the nights a competitor shows no price at all. It often means it has nothing left to sell that night.
- 5Each week, read the same nights again and see who moved.
Decide where your price should sit
Your place among them follows from what you offer against them. A better rating, a better location or larger rooms earn a place above the middle; pricing as if you had them when you don't sends guests next door.
- Find the middle of their prices for each night, and decide how far above or below it you belong on an ordinary night.
- Keep to that place as their prices move, rather than following any one hotel.
- Set a lowest and a highest price for each room, and stay inside them whatever the competitors do.
How far a hotel's price must fall below that of similar hotels nearby, each set against its own average over the past year, for Google to label it a Deal in its hotel results. At 25% below, Google labels it a Great Deal.
Follow the town, not one hotel
- When most of them raise their prices for a night, the town is filling. Raise yours with them.
- When one drops its price close to the date, it may have rooms to spare. Find out why before you follow.
- When several show no price for a night, they are probably full: a night to hold your price, or raise it.
- Look at what they offer as well as the price: breakfast, free cancellation, a later checkout. A guest compares the offer, not only the number.
Remember where guests make the comparison
Guests set you beside your competitors in Google's hotel results and in each booking site's list for your town. Google says hotels can't pay to influence their place in its hotel results, which are sorted by relevance unless the guest sorts them by price or rating. Booking.com names your prices on Booking.com among the things that decide where you appear in its own results. In both, a price out of line with the hotels around you is seen at once.
