Before we get into the data, here’s a simple breakdown of key terms:
- ADR (Average Daily Rate): This is the average amount of money a hotel makes per room each day.
- RevPAR (Revenue Per Available Room): This shows how much revenue each room brings in, calculated by multiplying the ADR by the occupancy rate.
- Occupancy Rate: This tells us what percentage of rooms are occupied, showing demand and how well the hotel is being used.
Now, let’s see what the data reveals:
An overall upward trend is observed in the overall hospitality market in terms of ADR, RevPAR and occupancy. The sector also saw the introduction of over 20,000 new rooms priced above INR 10,000 and a resurgence in business travel, both contributing to this positive performance.
By the end of 2021/22, the Indian hospitality sector experienced a notable recovery:
- Occupancy Rate: Increased from 34.5% during the pandemic’s peak to 49.9%.
- ADR: Rose from INR 4,630 to INR 4,951, reflecting a 7% increase.
- RevPAR: Improved significantly by 55% from the lows of 2020/21.
In the following year, 2022/23, the sector continued its upward trajectory:
- Occupancy Rate: Reached 66.1%.
- ADR: Soared to INR 6,869, marking a 32% growth from the previous year.
- RevPAR: Achieved INR 4,537.
How can Hotel’s Stay Competitive?
As and when the hospitality sector is flourishing across the globe two of the key ingredients which will contribute to profitability of the hotels in the market is understanding the booking trends and tracking the competition pricing.
Booking Trends: Advance vs. Last-Minute
In the hospitality industry, understanding consumer behaviour is crucial for optimizing revenue. Booking patterns can be categorized into two types based on when the reservation is made:
- Advance Bookings: Travelers who book 3 to 6 months in advance account for about 60% of reservations. These early bookings often secure rates up to 20% lower than those of last-minute reservations.
- Last-Minute Bookings: Representing roughly 40% of reservations, last-minute bookings are characterized by spontaneity and flexibility. These bookings often command rates that are 10-15% higher due to the urgent nature of the reservation.
Understanding these trends can give hotels an edge. By tracking real-time market data and competitors' prices, hotels can make smarter pricing decisions, ensuring they remain competitive and boost their revenue.
The Importance of Keeping an Eye on Competitors
To succeed in today’s hotel market, it’s essential to know how your competitors are pricing their rooms. We’ll take a look at how tracking competitors’ prices can help you shape your own pricing strategy, backed by recent market data and a case study.
Current Market Trends
In Q1 2024, the Indian hospitality sector experienced notable shifts:
- Average Daily Rate (ADR) increased by 8.5%, reaching new heights.
- Revenue per Available Room (RevPAR) saw a rise of 11.4%.
Metropolitan cities such as Chennai, Hyderabad, and Delhi reported substantial year-on-year growth:
- Chennai: +21.7%
- Hyderabad: +21.1%
- Delhi: +19%
Occupancy levels in major business hubs held steady at approximately 70%. This positive trajectory is expected to persist into Q2, driven by robust business and leisure travel. However, a potential slowdown might occur in late summer due to outbound travel and post-election periods.
To better understand the influence of competition pricing analysis, we will examine a detailed case study focusing on August 2024
To illustrate the impact of competition pricing, let's examine Hotel ABC’s performance in relation to its competitors. By analyzing case studies that contrast Hotel ABC with rival pricing strategies, we'll showcase how effectively utilizing competition pricing can dramatically boost revenue and secure a competitive advantage.
By harnessing ZettaRMS advanced algorithms and near real-time market insights, hotels can equip themselves with a profound understanding of their competitive landscape.
Our platform enables hoteliers to:
- Track near real time competitor pricing: Track and analyze how rivals set their rates to adjust your own pricing strategy effectively.
- Empower revenue analysts with our extremely powerful Travel demand indicator: Stay ahead of emerging demand trends and shifts in the market to ensure your business remains relevant and competitive.
- Real-time rate management & customizable alerts: Utilize live analytics for immediate rate updates based on current market conditions get receive alerts as soon as market conditions change
Uncover new opportunities, refine your offerings to meet evolving market demands, and sharpen your competitive edge through our complete pricing solution.
For more about the blog visit: https://sciative.com/research-articles/competitor-pricing-analysis-elevate-your-hotels-revenue-growth
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