You might hear the term “market demand” and wonder what it exactly means. The phrase becomes particularly common—and important—when discussing best practices for revenue management. This article will provide you with a thorough understanding of one of the most fundamental principles you need to consider when setting rates for your property.
“Market demand” refers to the level of interest customers have in booking room nights in a given location during a set time period. Properties need to pay close attention to their market demand while setting room rates. However, market demand changes based on the season, as well as many other contributing factors. These factors can complicate a property’s understanding and application of market demand to their revenue strategy.
Hotels take into account current occupancy rates, daily reservations pick up data, historical booking data, the competition’s prices, events, group reservation requests, and more, when they determine their property’s unique market demand.
It’s important to note that some factors which contribute to market demand are becoming increasingly difficult to predict. One example of an unpredictable factor in market demand is the rise in last minute travel planning by both the leisure and the business segments. Since so many people wait to plan their trips, it becomes more difficult to accurately predict your property’s market demand.
Other unforeseen events can send market demand into flux. Almost any unexpected event, from hurricanes to terrorist attacks to unforeseen election results, can damage a traveler’s consumer confidence. Manmade and natural disasters can disrupt travel plans or keep people away from a location all together. As a result, daily market demand is more challenging than ever to predict.
Processing market demand
As you might imagine, it can take superhuman effort to accurately gather and analyze all the factors that contribute to market demand. BookingSuite RateIntelligencer does all the heavy-lifting for our partners by anticipating unique market demand through aggregate Booking.com data.
Our partners have the advantage of the industry’s most reliable and unique data on how and when travelers are booking rooms. In the end, RateIntelligence helps partners analyze this diverse data set and recommends rates which keep a property’s market demand in clear focus.