November 2017: staff analyst –
In the 30 day run-up to any given stay-date, most hotels will change a given room rate at least once and most likely multiple times. The rate of change, also called the ‘volatility’, of room rates in that last 30 days gives an insight into how aggressive or how passive the hotel operator is when it comes to using price as a way to drive occupancy.
Here are some interesting insights;
- Across the world, there is an average variation of 18% between the lowest rate offered and the highest rate offered within the 30 days prior to arrival for any given room package.
- In Europe the dominant pricing trend is to offer the lowest rates around 15 days out and then move the rates higher towards the stay date… whereas in Asia the pricing trend is to offer the highest prices at 18 days out and creep lower towards the stay-date.
- The variation of 16-18% between highest and lowest rate within the last 30 days is consistent across the world, only the Middle East region is significantly different at 28% average variation
- In Abu Dhabi, Agra, Auckland, Barcelona, Hong Kong, Sydney and Jaipur – to name a few – the average low rate is at 30 days out from arrival.
- In Bucharest, Kiev, Toronto, Vancouver, Rome, and Amman, the average low rate is offered the day of arrival.
Let’s compare a couple of leading destinations; in Dubai, hotels on average reduce their rates as the stay-date approaches, so that by the time check-in comes around, the rate is typically 45% lower than it was 30 days previously! While in Beijing hotels offer their best rates at 30 days out and then gradually increase the room rates so that by the check-in time the rates are 37% higher on average. In Mecca, 4- and 3-star rooms are typically 177% higher at the last-minute than they are 30 days out.
These insights are produced from hundreds of millions of rates from multiple years across tens of thousands of hotels from the top destinations in the world. They don’t account for seasonal or specific fluctuations.. although that is all in the data and ready for analysis!
Ratemetrics tracks room rates across the world and provides real-time data and intelligence and analysis to hundreds of partners and thousands of hotels across the world. In October 2017 the company delivered over 100M rate calls to its partners and customers via its real-time API data service.