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Class One,

Live Rate

Live Rate. Demo


Live rates. Prices.

Bob Dylan told us in 1964 The Times They Are A Changin

You better start swimming or you’ll sink like stones, because times are changing< /i>”

Until a few years ago any hotel was worth any computer system, today not anymore, times have changed. The market no longer works with the premises that it used to, mainly due to its base: THE CUSTOMERS.

“And keep your eyes open. Opportunity will not come again”

Customers select another way, today Internet is accessed from any means and primarily from the Smartphone. Analyzing the operations of the clients, we find that the following are priority events:
  • The immediacy of the response.
  • Comparative consultation in various situations
    • Change of dates (immediate prices and conditions)
    • Meal Plan Change
    • More guests, more rooms, more extra children, …
  • A potential, resorts to eg and immediately to the website of the Hotel that seems to be the best. If we build loyalty on said website (become a corporate 3-10% less than on any engine, OTA, GDS, …
  • A Millennial client, “Z”, “Y”,…, wants technology and is willing to pay for it
  • Express Check-In Check-Out, invoice and mobile payment, Loyalty (I want to know when I was there, what I paid, what photos I took, a reservation in two clicks and with my discount, …)
  • In summary that the Client does your work, it is no less true that you do it that way with the bank and you are happy and they charge you more than that.

“Your old path is eating away fast”

Y&R Management As quoted “the client is basic”, but not at any price, so a hotel must act according to its Yield & Revenue immediately, easily and react to significant events
  • First of all have your Y&R Management parameters and not be an engineer in your design.
  • Know our KPIs and react to changes in trend.
  • The more/less occupancy, the higher/lower price
  • Immediate price changes on OTAs Channel, …
  • Automation in correction factors such as Event calendars, Pick Up curves (trends in demand), Forecash, Booking position, …
  • National or international events, general specific events, impacts, supply and demand, confidence, fear,…, all these elements can occur, in fact they do occur, therefore we must have the power of immediate reaction in our system and anticipate other hotels.
  • Know seasonality and try to reverse it in our favor.
  • Act immediately in the event of a change in the rate of sales or similar behavior in the expected trend.
  • Knowing the operational habits when making reservations by the client, the company client who makes their reservations on Sundays or at “untimely” hours is not the same as the one who makes them at 10:00 am, or who make them later volume of reservations on Mondays than on Wednesdays, …

“And the present now will be the past later, and the first now will be the last later, because times are changing”

What and why of AI in Hotels First of all, we will say that there is significantly no adequate mentality today in the market (hotels) for change, if one is aware that sooner or later it will have to be done, but that it is still early, tremendous mistake< /b>, those who stay thinking will arrive late and that will be paid dearly. Today we must have immediate answers to the changing market situation and they must be given to us “free of charge” by our SHMS, which we observe that our demand curve has gone up/down, the system must alert us (trigger ) of said situations and even better the system itself will act by raising or lowering prices, according to the algorithms that we have in our hotels. How to act and know where we should go. Our SHMS must tell us which channels, segments, source business… are working for us and which are not, through a mixture of BI (Business Intelligence) and CRM.
  • If we know that an OTA gives us a lot of reservations but its net (NetADR) is not profitable for us, we will have to act accordingly, maybe it is not so interesting to have such dependence on it.
  • If we find that there are many cancellations in …, we will have to take the appropriate measures with said OTA, TTOO, GDS, …
The most important of all the above is that our SHMS talks to us and tells us “almost” what we should do, this is the hotel of the future, in which robots with AI (our SHMS) make the decisions, even if that Yes, we humans have the last word. Does it scare us? It is less true that a few years ago we were talking about how phones could… and it seemed like science fiction and today who does not use a Smartphone… Why isis needed update and b>use AI? Artificial Intelligence equal to set of algorithms. By definition, an algorithm is like an instruction manual for solving a problem. If the problem were cooking a paella, the algorithm would be the recipe. Let AI work for us and we can more clearly get the best Y&R Management of our hotels.

What is the optimum price/s that we should offer for sale in our hotels.

“Of course”, there is no single price, the channels, segments,…, may define different behavior values and even different weighting values in our algorithms.

Since we know what affects our prices, I ask you, wouldn’t it be easier with good data mining, to obtain them with AI and for the systems themselves to update the different Channels: OTA’s, Booking Engines, Chanel Manager, …

We must make the system itself learn to behave (Learning Machine), for this we must observe the behavior log and correct those that depend on our intellect

As a fundamental fact, we must indicate that there should not be a single rate, we should have different rates according to various Hotel criteria, the most normal being Segments, Channels, Companies, …, (normally they should be included in segments), of course there shouldn’t be many. My opinion about it is that we are talking between 3-7 different ones.

To set a pricing policy for a Hotel, the first thing we need to know is what our minimum and maximum rates may be (in the “maximum” case, it may lead us to indicate that this should not be the case, It is clear that at a certain moment, due to many circumstances, we could charge exorbitant prices. However, I consider that this “taking advantage” of the situation could affect us in the future, however, those who consider that they can set prices well above your possibilities with defining the rates in this regard, is/will be your decision). Of course, these maximum and/or minimum rates are determined by the room types, just as we could have more than one maximum-minimum rate depending on which channels or segments.

As a second basic idea, since there are two different philosophies or a mixture of both, is our hotel the benchmark when setting prices, or is it an external factor that determines it: is a hotel in the area the benchmark, or is it the reference zone which could mark the prices. I am inclined to be fundamentally responsible for the pricing policy according to our characteristics, costs,…, and of course without stopping looking to the sides.

Bearing these two basic ideas in mind, we will therefore list the factors or parameters that will make the design of Automatic Smart Rate us:

Basic Parameters

  • We must consider the moment in time the situation of our occupancy in the hotel, it is clear that the lower the occupancy should correspond to a lower price, and the opposite, so we must study the occupancy sections that may determine or affect our price list.
  • When a reservation is going to be made, what we all like the most is to have future occupancy guaranteed, so the further away the lower the price (early booking or early bird), as in the previous case the sections to be implemented should be studied.
In both cases they can be applied to the “%” sections of increase or decrease I consider these to be the two basic parameters, which somehow set the structure on which to mount Automatic Smart Rate, these parameters are called You must add all the corrective factors that “correct” them according to their values.

YRM is the practice of achieving the greatest possible income from the sale of perishable items, controlling the price, inventory and improving the service

Imagine an airplane Price Profiles
  • Occupancy “1” means the minimum we have to have for the plane to leave, or even “skewer offers”
  • Occupancy “2” we cover costs
  • Occupation “3” we started to earn
  • ….
  • The occupation “8” where we earn the most
We must always bear in mind that there may be different tariffs depending on the market segments, channels, etc,…, that at no time is there talk of a single / single tariff, being able to have as many as we want and with any of the above data (sections ) as subsequent different correction factors (eg, for a channel the regime prices will always be maintained, but for another market segment they will vary according to the algorithms).

We define the sections for the MATRIX that will generate a first automatism of the prices. Occupancy stretches from MORE or LESS and release days from LESS to MORE are involved.

In the gaps of the generated MATRIX, the rates already created and that generate a FIRST PRICE will be entered.


Let’s create the following assumption of 5×5 sections

Where we assume that the lower rate is equal to = “0” which corresponds to the coordinates ( %occupancy 5, Days 5)

Starting from this base, we increase the price by 5 units, with the rate (%occupancy 1, days 1) being the most expensive, due to being at maximum occupancy and dates very close.

Automatic Smart Rate

Health settings. They will correct the characteristics of previous occupations and/or prices

  • Analyze if we are going to consider at the time of the basic calculation, this is done on the global occupancy of the hotel, or the occupancy of each type of room.
  • Consider a corrective factor according to calendar of events.
  • Consider the geopolitical factor (wars, elections, black swans, …)
  • Modify or not Regime Rates, Minors, Extra People. There will be hotels that consider that the Regimes do not depend on the automatisms that are the ones that are set according to seasons and there will be others that are important.
  • Set “round” prices Round prices this affects the final price
  • Always consider a minimum rate and a maximum rate, which may be different. They always affect the final price

When done the reserve.

  • Analyze At what times are the most reservations made. An example is Mobile Booking, which many activate at night and deactivate in the morning. A guideline can be the higher the volume of reservations, the higher the prices, which does not always have to be the case
  • Day of the week. It has been detected in recent studies that in business hotels, they usually make reservations on holidays, setting the pattern that is considered appropriate.It is observed that the businessman makes more reservations on Sundays and outside office hours

What we will indicate is a “%” that will increase the prices already calculated.

If we make an update at 9:00 am, it is assumed that reservations made from that time until .., will be governed by said rule, in the same way as the day of the week in which we are.

More corrective parameters

  • Always consider a minimum rate and a maximum rate, which may be different. They always affect the final price
  • Occupation of the area
  • Occupancy of the reference hotels in the area
  • Average price of the area (indicate which rooms are not affected)
  • Average Price of Hotels in the area (indicate which rooms are not affected)
  • Predictive occupation of the area
  • PickUp at “short” booking pace (analysis of fluctuation in previous days)
  • PickUp to “long”, it is likely that this parameter is not significant, it could have a lot of variability depending on dates, …
  • “Long” weather correction factor, affects long-term reserves
  • “Short” meteorology, a short-term study of days up to 10 days is the most reliable, it affects last-minute reservations.
  • Cancellation rate (percentage or value)

Area Occupancy Factor: When through an external interface we obtain the Occupancy value in the Area/Zone where our hotel is located.

Competitors Occupancy Factor: When through an external interface we obtain the Occupancy value of those hotels that we have marked as our competitors.
Area Average Price Factor: When we obtain the Average Price value through an external interface in the Area/Zone where our hotel is located.
Average Price Factor Competitors: When through an external interface we obtain the value of the Average Price of those hotels that we have marked as our competitors.
Area Occupancy Forecast Factor: When we obtain the value of the Occupancy Forecast in the Area/Zone where our hotel is located.

First of all, we must clarify that if we receive this data by channel (Booking, Expedia, …), they are added and divided by the number of Channels to find an average.

  • % Occupation of the area = OCZ,
  • % Occupancy Competition = OCC,
  • % Hotel Occupancy = OCH

OCZ < OCH is that we are better managers should imply that?

OCZ > OCH we are supposed to try to reach that occupancy (OCZ-OCH) = %DIF (apply to the actual occupancy of the OCH Hotel) plus %, that is, we can apply said difference to 100, 75, 50 or whatever we see.</b >

OCC < OCH is that we are better managers should imply that a reduction could be applied to the reverse of the next step

OCC > OCH we are supposed to try to reach that occupancy we are supposed to try to reach that occupancy (OCZ-OCH) = %DIF (apply to the actual occupancy of the OCH Hotel) plus %, that is, we can apply said difference to 100, 75, 50 or whatever we see.

Both criteria can be applied if checked

  • Average Price of the Area= AVRZ
  • Competitor Average Price = AVRC
  • Average Hotel Price = AVR
  • Note room type differences

Same criteria as above but taken to “%”

Correcting parameter for the Calculation of the occupation of the area

  • Difference between our occupancy and the occupancy of the area = “%”, another fixed percentage is applied to this percentage, and said “%” is applied to the percentage that we have obtained, thus being able to vary the section in which it is located.
  • Corrective parameter for the Calculation of occupancy in the area of the Competition hotels.
  • Same as above.

Maximum and minimum rate. Minimum price per Room Type, maximum price per Room type. Alerts Triggers

Extract from the presentation of the Live Rate module, embedded in the SHMS system – Smart Seven Stars

The data and graphics have been obtained from different talks given by Class One staff, as well as different PrintScreens of application screens Smart Seven Stars

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