How to use PriceLabs for Hotels: Understanding Custom Compsets 

In the dynamic hospitality industry landscape, staying competitive is paramount for success. Dynamic pricing has emerged as a game-changer, and PriceLabs stands at the forefront. It offers a powerful toolset for hotels to optimize their pricing strategy. In this blog post, we’ll delve into what are hotel compsets and how to use PriceLabs for hotels, focusing on the advanced customization feature of custom compsets.

What is a comp set?

A comp set, short for competitive set, refers to a group of hotels that potential guests consider when making booking decisions. These hotels are competitors that are compared against your property, not just based on location but also considering various factors such as target market, amenities, pricing, and brand affiliation.

Understanding your comp set involves identifying hotels in your vicinity, those catering to similar corporate clientele, sharing brand affiliations, offering comparable amenities like pools or restaurants, and sharing similar pricing strategies. It encompasses a thorough analysis of room types, suite options, pet policies, security features, guest amenities, and other relevant details to gauge your competitive position in the market accurately.

How to identify your comp set?

Identifying your comp set involves strategically assessing key features and benefits your property offers compared to neighboring hotels. Focus on properties similar in size and amenities to accurately gauge competitiveness. For instance, a limited-service property with breakfast and meeting space won’t directly compete with a large banquet center, and that’s acceptable.

Effective sales strategies hinge on a thorough breakdown of the comp set. Conduct extensive research or involve your team to gather detailed information about each potential competitor. Assign team members to different properties and incentivize them to gather comprehensive insights.

Consider various traveler personas to understand how different guests would evaluate properties. For instance, corporate travelers may prioritize reward perks and proximity to their company, while wedding guests might prioritize shuttle service or discounted rates.

By evaluating properties from multiple perspectives and understanding how travelers perceive each option, you can accurately identify your comp set and tailor your strategies accordingly.

How does PriceLabs work?

PriceLabs employs a sophisticated algorithm considering various factors to generate optimal hotel pricing recommendations. These factors are broadly categorized into three buckets: broad trends, daily demand trends, and lead time-based trends. Broad trends include elements like base price and seasonality. Daily demand trends reflect fluctuations in demand for specific dates. Lead time-based trends adjust prices based on how far in advance a booking is made.

Which customizations are offered by PriceLabs for Hotels?

Recognizing that each hotel has unique considerations, PriceLabs offers advanced customization features to fine-tune pricing strategies. Among these, the Custom Compsets feature is pivotal in tailoring the pricing approach. It gives recommendations based on what is happening with the neighboring hotels. Let’s discuss these customizations in detail.

Demand Factor Sensitivity:

One crucial aspect of PriceLabs customization is the Demand Factor Sensitivity setting. This feature allows hoteliers to adjust the sensitivity of their pricing to daily demand trends. You can choose from options like Recommended, Low, High, or No Demand Factor. Hence, it provides flexibility in managing price fluctuations based on demand for specific dates.

• Recommended Setting: The default setting where PriceLabs optimizes pricing based on the algorithm’s recommendations.
• Low Setting: A conservative setting for users who prefer more stable pricing and less sensitivity to daily fluctuations.
• High Setting: An aggressive setting for those who want to maximize prices during peak demand periods.
• No Demand Factor: Turning off the demand factor for dates where dynamic pricing adjustments may not be desired.

You can set the demand factor to come from the full hotel data tab instead of Airbnb. This provides more accurate pricing based on hotel-specific demand trends.

Customize Hotel Weights:

The next customization feature is Customize Hotel Weights, which allows hoteliers to control the influence of hotel-like properties in the pricing calculations. This is particularly beneficial for properties that share characteristics with both hotels and short-term rentals. It can be divided into the aforementioned categories.

• Mostly STR: 10% hotel weight, suitable for properties predominantly catering to short-term rentals.
• Mostly Hotel: 90% hotel weight, ideal for hotels with limited short-term rental attributes.
• Fully Hotel: 100% hotel weight, suitable for properties exclusively functioning as hotels.
• Fully STR: 0% hotel weight for properties exclusively functioning as short-term rentals.
• Balance: 50% hotel weight, a neutral setting for properties with a mix of hotel and short-term rental features.

Customize Hotel Compsets:

Customize Hotel Compsets is a crucial feature that allows you to select specific hotels for pricing comparisons. Here are key considerations for this customization:

• Ensure a minimum of 5 hotels in the compset for effective comparisons.
• The selected hotels in the parent listing’s hotel data tab will be considered for child listings, or default hotels will be used.
• Hotel prices used for the comparison are based on a length of stay (LOS) of 2 nights, using Best Available Rates for double occupancy.

You can set the demand factor to come from the hotel data tab instead of Airbnb, providing more accurate pricing based on hotel-specific demand trends.

Steps to Conduct Hotel Competitive Set Analysis using PriceLabs

Conducting a Hotel Competitive Set Analysis using PriceLabs involves several key steps to ensure accuracy and effectiveness in benchmarking your property against competitors.

1. Identify Key Competitors: Identify hotels in your area that are considered direct competitors. These are properties that offer similar amenities, target the same guest demographics, and are located in close proximity to your hotel.
2. Access PriceLabs Dashboard: Log in to your PriceLabs account and navigate to the Dashboard or Competitive Set Analysis section.
3. Define Custom Compsets: Utilize PriceLabs’ Customize Hotel Compsets feature to create custom compsets tailored to your specific market. Select hotels from PriceLabs’ database that closely match your identified competitors.
4. Select Relevant Data Points: Choose relevant data points and metrics to analyze. This may include room rates, occupancy rates, booking trends, amenities offered, and guest reviews.
5. Compare Pricing Trends: Use PriceLabs’ tools to compare your hotel’s pricing trends with those of your identified competitors. Analyze how your rates stack up against the competition over different time frames, such as daily, weekly, or monthly.
6. Evaluate Occupancy Patterns: Assess occupancy patterns of your compset hotels to understand demand fluctuations in the market. Identify peak booking periods and adjust your pricing strategy accordingly.
7. Analyze Amenities and Guest Satisfaction: Compare the amenities offered by your hotel with those of your competitors. Evaluate guest satisfaction metrics such as review scores and ratings to identify areas for improvement.
8. Adjust Pricing Strategy: Based on your analysis, adjust your pricing strategy to stay competitive in the market. Consider factors such as seasonal demand, special events, and competitor pricing trends.
9. Monitor Performance Regularly: Continuously monitor your hotel’s performance relative to your compset. Regularly review pricing data, occupancy rates, and guest feedback to make informed decisions and adapt your strategy as needed.
10. Iterate and Optimize: Use insights gained from your competitive set analysis to refine your pricing strategy over time. Experiment with different pricing tactics, monitor the results and iterate to achieve optimal revenue performance.

By following these steps and leveraging the features of PriceLabs, you can conduct a comprehensive competitive set analysis to understand your market position better and drive success for your hotel.

Conclusion:

PriceLabs empowers hotels with dynamic pricing strategies that adapt to the nuances of the market. The ability to customize compsets based on demand sensitivity and hotel characteristics, along with the flexibility to set the demand factor from the full hotel data tab, provides a level of precision that is invaluable in today’s competitive hospitality landscape. For hotels seeking to maximize revenue and outperform the competition, PriceLabs, with its advanced customization features, is a key ally in the journey toward success.

Key Takeaways: 

• PriceLabs offers advanced customization features, including Demand Factor Sensitivity and Hotel Weights, allowing hotels to tailor their dynamic pricing strategy with precision.

• Customize Hotel Compsets enables hotels to select specific competitors for pricing benchmarks, ensuring accurate comparisons and strategic decision-making.

• Hoteliers can fine-tune sensitivity to daily demand trends with Recommended, Low, High, or No Demand Factor settings, providing adaptability to different market scenarios.

• Customize Hotel Weights allows hotels to control the impact of hotel-like properties in pricing calculations, ensuring accurate rate recommendations based on property attributes.

• Setting the demand factor to come from full hotel data enhances pricing accuracy, providing hotels with a competitive edge in the dynamic and ever-evolving hospitality landscape.

About PriceLabs

PriceLabs is a revenue management solution for the short-term rental and hospitality industry. It was founded in 2014 and is headquartered in Chicago, IL. Our platform helps individual hosts and hospitality professionals optimize pricing and revenue management. It does so by adapting to changing market trends and occupancy levels.

With dynamic pricing, automation rules, and customizations, we manage pricing and minimum-stay restrictions for any portfolio size, with prices automatically uploaded to preferred channels.

Every day, we price over 300,000+ listings globally across 135+ countries, offering world-class tools like the Base Price Help and Minimum Stay Recommendation Engine. Choose PriceLabs to increase revenue and streamline pricing and revenue management. Sign up for a free trial at pricelabs.co today.