Why Rate Shopping Software Is Pivotal To Strategize Pricing?

02nd Aug 2023

Vervotech - Hotel Mapping, Room Mapping and Hotel Master Data NB: This is an article from: Vervotech

Hotel rate shopping software is a price analysis tool for hotels. It offers real-time rate intelligence and makes revenue management easy in a highly rate-sensitive hotel market. Here in this article, we’ll evaluate the role of hotel rate shopping tools in overall pricing strategy of hotels. 

Room rate is one of the key decision drivers in your business. It could simply be the reason why an individual chooses to go with you over your competition. Setting room rates is an intricate game; you need to gauge many variables and factor in market sentiment to come up with room prices. And to price room rates competitively, you need hotel rate shopping software. What is this tool? How does it function? And how it can help you strategize your hotel room prices better is what we are going to discuss in this post in greater detail. We will explore all the tool’s possibilities and the features you need to know before employing this tool in your business. So let us start with understanding the basics of this tool and check Why Hotel Rate Shopping Software Is Pivotal To Strategize Pricing?.

What Is Hotel Rate Shopping Software?


A Hotel Rate shopping tool does precisely what its name suggests. It helps you shop around for the rates of different hotels, including your competitors. It offers you insight into two critical variables of hotel room pricing – Rate Visualization and Rate Parity. Analysis of these two variables will form the foundation of your pricing strategy. Almost all rate shopping tools have filters that offer more micro details like a city-level view, area-level view, etc. Also, you can check your online ranking based on your current pricing structure.

 But what are Rate Visualization and Parity? Sound like jargon? Let’s break them down.

a) Rate Visualization 

Hotel Rate Shopping Software will give historical rates and rate predictions of the hotels in your category, including your hotels. You can use the tool to visualize your rate for each room category for every day of the year and match those rates with your competition. The whole exercise put together is called “rate shopping.”

b) Rate Parity 

The rates you see in the rate visualization module of a Hotel Rate Shopping software are crude, advertised rates. After checking out, an individual’s actual payment could vary hugely from the advertised rate. Therefore, making pricing decisions solely based on visualization will be premature. That’s why you need insights into Rate Parity. What’s Rate Parity? 

Rate parity is a cumulative comparison of room rates where every room component is compared with similar room components of other hotels. The breakdown of rate parity gives you a clear picture of what other hotels in your category are charging. With a hotel rate shopping tool, you can get comparable rate parity data of any hotel, inside or outside your competition.

By now, you would be convinced that the rate shopping tools have value when it comes to knowing where your pricing stands compared to your competitors. But does it help in strategizing the long-term pricing of hotel rooms? The answer is a resounding yes. Next up, we are helping you explore use cases of hotel rate shopping tools that help you with a long-term pricing strategy.

How to use Hotel Rate Shopping Software for Competitive Pricing?


Devising a sustainable competitive pricing strategy using rate shopping tools is not a demanding task. All you need to do is use the data pulled by your rate shopper to your advantage. When you use a hotel rate shopper, you may uncover a lot of surprising data that you can use for your competitive edge. Here we are helping you by citing some possible use cases that can directly benefit you; if not, you can use them as a reference point to devise your own pricing strategy.

a) Counter Pattern  

Once you employ the rate shopper tool, you will find most hotels have a pattern in their pricing. Many hotels will be using the BAR pricing module, which we won’t recommend if you are using a rate shopper tool. Cutting the chase, you will have to study and identify patterns in your competitors’ pricing, understand when they hike when they lower their prices and prepare a counter pattern of pricing that works for your advantage.

b) SWOT Analysis  

Using rate shopper software for SWOT analysis of your existing pricing strategy can work wonders for you. You can start by comparing your online standings with your competitors. If you lack, you know what to do. If you don’t, market your standings and leverage them in pricing. Now you know the drill, you can explore many similar opportunities for better pricing and correction.

c) Unearth the Unknown 

The odds are high that you don’t know where you outperform your competitors, as hotel room rates change like the values of stocks change in exchanges. We talked about patterns earlier. And here we take you to the point where you are breaking down rate parity and the numbers you unearthed through visualization. If you find you are outperforming your competitors in any category, you can use transparent pricing in that category, which is rare in the hotel industry. It will serve well both your marketing and sales objectives.

There are no two thoughts about the insights hotel rate shopping software provides through rate visualization and parity modules. It helps you maneuver your day-to-day pricing. Also, as we mentioned, hotel rate shopper tools can be monumental in strategizing a long-term pricing strategy for your hotel. You can use the cases we mentioned as reference points and take the lead.