Industry Update
Opinion Article21 June 2018

Are you truly maximizing your revenue on room rates?

How to take advantage of hotel price fluctuations

By Max Chertkov, Chief Commercial Officer at Gimmonix

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Prices in travel fluctuate. This is an undisputed fact, not only on the B2C side of travel, but also on the B2B side. The prices of hotel products can and do change regularly. These changes often negatively impact the purchaser of the inventory, with sold-out errors or decreased margins. So how can buyers take advantage of the ever-changing market?

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In the travel industry, as elsewhere, if demand rises, the price does too. The same applies when booking hotels. If there is an increase in queries for a particular hotel, the price will increase. In addition to demand, price fluctuations are also a result of commercial considerations, technical issues, and the many breakage points in the distribution flow that can cause a sold-out error.

Interrupted search to book flow

Most OTAs work with multiple suppliers, and many suppliers buy inventory from each other. While it is possible to run a live search for each property, often times, stored results are used in order to decrease search times and conserve computing power. This means that when a search is not live and is based on inventory pricing that may have since changed, the seller will get one of three results:

  • Sold-out error = lose the customer permanently and their future bookings.
  • Lower than market price = less margin, or lose money to retain the customer.
  • Higher than market price = less competitive, may lose the sale.

Another aspect affecting the seller's ability to offer the most competitive rates, is the variation in supplier response times as well as the seller's own technical capabilities and preferences. What if an OTA sets its search times to 2 seconds in order to provide a good customer experience, and the supplier with the cheapest buy rate has a 5 second response time? Then, the OTA is unable to see best buy rate, and ultimately misses out on additional profit.

A new reality?

But what if there was a way for OTAs and suppliers to reduce sold-out errors and query all their suppliers? And what if it was also possible to take advantage of the market price fluctuations to increase revenue, all this after the customer books?

The search to book flow, until now, has been clearly defined. When a customer requests a booking, the OTA offers him a price from a chosen supplier. When the booking is finalized, the booking is made with the original inventory provider. There may be a way to change this and create a new reality. There may be a way to search for a better buy price, imperceptibly in the background, after the customer booking is made, and to take advantage of price fluctuations to substantially increase revenue. The question is how?

Sign up and be the first to find out: Reservation.Works. Coming July 3rd.

To learn more, feel free to get in touch, [email protected], or visit our website.

Max Chertkov

Max is the CCO at Gimmonix, where for the last seven years, he has been focused on translating the company’s technological capabilities into commercial strategies to help travel businesses optimize performance and maximize profits. With a background in communications, Max utilizes his studies and his work experience to provide suppliers and distributors with innovative solutions for their businesses.

    More from Max Chertkov

    Gimmonix is a technology company that helps travel businesses increase their revenue and boost efficiency through automated mapping technology, API connectivity, and profit optimization tools. Gimmonix pushes the limits of technology to help travel businesses minimize waste and maximize performance with its cutting-edge, cloud-based products.

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