Your Property’s Guide to Pricing Intelligence

By Alex Gaggioli, February 10, 2017


In today’s market, there are thousands of metrics pouring into property owners and revenue managers’ spreadsheets. Properties use data to make pricing decisions on a day-to-day, seasonal, and yearly basis. Pricing intelligence is all about using the best market data to make decisions. It’s impossible to manually pay attention to each and every one of your competitor’s listing on every OTA, and that’s where software can play a meaningful role.

Here we’ll walk through the different aspects of pricing intelligence and the impact they can have on your property whether you’re a hostel or a large scale hotel.

Components of Pricing Intelligence


Pricing intelligence has two roles, as Hotel Executive explains in their article: business intelligence and competitor intelligence. Together, they combine to create a robust knowledge set to make smarter pricing decisions. Business intelligence focuses on different time frames, past, present, and future. All business intelligence refers to internal operations and the metrics directly related to an individual business. For example, how many rooms are filled on any given night or what is the cost per filled room a night?

Competitive intelligence focuses on external metrics related to your competitors and their performance. Typically, the metrics used to gauge competitor performance are the same as one would use to gauge their performance. The difference is that an individual property will compare their performance to the market and track percentage changes, either in a graph or table. I.e. your comp set’s ADR is 25% lower than your current rates.

The same key performance indicators are used to calculate a property’s performance against their competitor’s performance, but obviously, a property will have more robust data for their own property.

Below we’ll walk through some of those key components.

Your Key Performance Indicators

Your key performance indicators are the main data points used to gauge your operations. In a recent blog, we laid out the top key performance indicators for 2017. We included the basics, like occupancy rate, average daily rate, and revenue per available room.

There are a few other metrics property owners should keep their eye on, like cost per occupied room, which helps owners and managers better understand operating expenses.

Online reviews and survey results are another great source of performance. While star ratings are far from perfect due to context and bias, they give properties insight into what is working and what is not.

Your Competitive Set

Business intelligence and pricing intelligence will only be as good as your data. Pulling in every neighboring property’s information will prove impossible and inefficient. Instead, properties must create a competitive set– a group of principal competitors for your property. We recently wrote about how to approach competitive sets on our blog.

As you’ll see in our blog, we suggest creating multiple competitive sets that vary based on competitor type and time of year. Like everything, your comp sets should change over time and respond to changes in the market.

Yield Management Strategy

Pricing intelligence and market information fuel yield management strategies. Once upon a time, cost plus pricing was sufficient for most properties to sell their rooms. Cost-plus pricing is a cost-based method for marking the prices of rooms, which uses direct costs like labor and overhead and a percentage markup to come to a final price, as per Accounting Tools.

But in today’s market, it’s more beneficial to adopt a fluid pricing strategy. As outlined in Shared Inventory and Yield Management, the point of yield management is to make more money, but it’s more complicated than just raising your room rates. Changing your prices and inventory allocation in real-time will help you generate more revenue than a static pricing strategy.

In order to effectively change your rates and increase revenue, a property will need accurate, up-to-date information on the market. And that’s where pricing intelligence comes into play. A property must know their performance metrics, their competitor’s performance metrics, as well as key trends playing out in the market. Pricing intelligence software is where this comes into play.

What Pricing Intelligence Software Does


Pricing intelligence software syndicates information from both you and your competitors. It allows you to see how your occupancy, revenue per available room (RevPAR), and average daily rate (ADR) change over time. When you’re able to quickly view your property’s key performance indicators in real-time, you will find better ways to price and distribute your inventory.

Independent property owners are often at the mercy of their own data calculations to decide which pricing strategies work. Pricing intelligence software, while not perfect, allows properties to get a comprehensive view their operation. With better market data, property owners can reduce gunshot reactions and become more proactive.

What Pricing Intelligence Can Do for You

After calculating your key performance indicators, identifying your comp sets, and tracking market behavior, it’s time to put the information to work.

Rule-Based Rate Changes

Good pricing intelligence software allows you to collect data and use it to your advantage. One way to do this is through rules. You set up a rule that triggers your rates to increase or decrease based on market demand.

For example, let’s say a property knows they’re going to sell out for New Years Eve. The property can create a rule that automatically increases their rates when they reach 50% occupancy for the designated night. Pricing intelligence systems allow you to adjust your rates in real-time or notify you when you’ve reached a certain level.

Potential rules can be based on occupancy percentage, as mentioned above, rules based on your comp set and their performance, or minimum length of stay changes based on different variables.


Pricing intelligence and the data associated with it are complicated. Identifying the right market data and putting it into action takes time and effort. Thankfully, new software and tools are becoming more widely available to properties of all sizes. The accommodation market changes from day-to-day and even from hour-to-hour. Creating a dynamic pricing strategy based off a real-time market data will help all properties increase profit margins and revenue streams.

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