The beginner’s guide to hotel market intelligence

Let's paint a scenario:

Your booking pace is slightly behind last year's, but week-on-week pickup remains steady. You've noticed something intriguing - your room rates are slightly higher, while competitors haven't increased theirs. You observe them adjusting prices, launching promotions, and revamping marketing strategies.

Despite this, you decide to hold firm. After all, you’re only 15 rooms down compared to the same time last year.

As the holiday period draws closer, one by one, your competitors begin dropping their rates, worried about filling their remaining rooms. Then, a snowstorm hits. Competitors panic, slashing rates by $50 to $100.

You, however, stay the course. The result? A successful week, where you’ve outperformed the market despite the storm. But, what made the difference for your hotel? What gave you the confidence to stick to your plan?

The ability to see the bigger picture through real-time market intelligence, so you could anticipate changes rather than react to them. With detailed insights into competitor moves and demand trends, you saw the market shifts before they happened, giving you the clarity to hold your ground, even when others faltered.

In an industry where the slightest misstep can lead to missed opportunities, understanding market intelligence is essential to strategic revenue management. So, what exactly is hotel market intelligence, and how can it transform your approach to hotel revenue management?

What is hotel market intelligence?

Hotel market intelligence refers to the systematic process of gathering, analyzing, and interpreting data about your local destination and competitors. It goes beyond just knowing your own hotel's performance; it provides a broader perspective that includes insights into competitor activities, market trends, and external factors that could impact your business.

At its core, the key purpose of hotel market intelligence is to summarize the state of the competitive landscape at any given time, offering a snapshot of current market conditions which can help you to forecast future trends.

By understanding both where the market stands today and where it’s headed, you can make informed, strategic decisions that position your hotel to capitalize on upcoming opportunities or prepare for potential challenges.

Key types of market intelligence data include:

• Competitor pricing: You monitor competitor rates to adjust your own pricing strategy. This helps you position your offerings competitively, whether by matching, undercutting, or setting premium rates, ensuring your market share and revenue are protected.

• Market demand trends: You analyze booking patterns to forecast demand fluctuations. This enables you to optimize inventory management and tailor promotions to market conditions.

• Guest preferences: You track guest behavior and feedback to refine your services. By catering to what guests value, you enhance their experience and boost loyalty, leading to higher repeat business.

• Local events and external factors: You monitor local events and broader influences like weather or economic shifts. Then, by proactively adjusting your strategy, you ensure you capitalize on opportunities and mitigate risks from market fluctuations so that you are always positioned effectively.

• Benchmarking: You compare your performance metrics against competitors. Benchmarking highlights your strengths and areas for improvement, guiding strategic decisions that enhance profitability and competitiveness.

By leveraging these key data types, you can navigate the competitive landscape with confidence, ensuring your strategies are always data-driven and aligned with market realities.

Market Intelligence vs. Business Intelligence in the hotel industry

While market intelligence offers a broad view of the competitive landscape, understanding your internal operations is equally crucial. This is where business intelligence comes into play.

As we’ve discussed, market intelligence helps you understand the competitive landscape and identify opportunities or threats that could shape your hotel’s performance.

In contrast, business intelligence turns the focus inward, predominantly analyzing internal data from your hotel’s systems, such as your property management system (PMS), point-of-sale systems, and customer relationship management (CRM) tools.

The effectiveness of your revenue strategy also hinges on this internal analysis. Throughout the entire commercial cycle, you gather important performance data - a business intelligence solution organizes and presents all of that data to give you a clear view of how you’re tracking against KPIs.

This insight allows you to identify opportunities to optimize strategies and ultimately attempt to increase revenue.

Key Differences:

• Focus: Market intelligence looks outward at market conditions; business intelligence looks inward at your own property’s performance.

• Purpose: Market intelligence helps you anticipate market changes to inform pricing and strategy; business intelligence enables you to analyze and optimize your internal performance to drive revenue growth.

• Data sources: Market intelligence uses external data; business intelligence relies primarily on internal data.

By combining market intelligence with business intelligence, you create a comprehensive approach to revenue management, balancing external market factors with internal performance metrics to drive better decision-making and sustained revenue growth.

How does market intelligence software work?

A market intelligence solution automates the process of gathering and analyzing the vast amounts of external market-related data that revenue managers need to make informed decisions.

As a result, hotel stakeholders have access to real-time insights that are crucial starting points for building solid revenue management strategies.

Important capabilities of market intelligence software:

• Real-time data collection: Automatically pulls in competitor pricing (including short-term rental), market trends, OTAs, and booking patterns, ensuring you’re always equipped with the most current insights.

• Competitive analysis: Provides a clear comparison of your hotel’s performance against competitors by offering insights into competitors’ current, past, and future pricing strategies.

• Demand forecasting: Uses predictive analytics to anticipate demand, allowing you to proactively adjust pricing strategies to maximize revenue during high and low demand periods.

• Customizable dashboards: Transforms complex datasets into intuitive visualizations, making it easier to spot trends and take decisive action.

• Alerts and notifications: Keeps you one step ahead by notifying you of significant market shifts, so you can quickly adjust to changes in demand or competitor moves.

Market intelligence tools to help you understand your market in new ways

1. Rate Insight: The hospitality industry’s leading rate shopping tool provides 360-degree visibility into competitor rates and is the first solution to combine hotel and short-term rental data into a single platform, offering a comprehensive market view.

2. Market Insight: The industry’s first predictive market intelligence tool, capturing real-time hotel booking intent to uncover new revenue opportunities with 365 days of forward-looking data.

3. Benchmark Insight: Helps you measure your hotel’s performance against your competitive set (compset), using key metrics like occupancy rates, ADR, and RevPAR, to pinpoint areas where you can focus efforts that will have the greatest positive impact on your business.

These powerful market intelligence tools are designed to help you uncover new opportunities, stay ahead of the competition, and fine-tune your revenue strategy. By integrating them into your revenue management arsenal, you gain the insights needed to make data-driven decisions that enhance your competitive advantage and drive long-term, sustainable growth.

In fact, using a tool like Market Insight can enhance your forecasting accuracy by up to 20%, while research shows that hotels using Market Insight saw a 2.3% higher RevPAR and a 4.7% higher occupancy.

3 reasons hotels rely on market intelligence

With the competitive landscape constantly evolving, market intelligence has become indispensable for hotels looking to maximize their profitability. Here are three reasons why hotels rely on market intelligence:

1. Gain visibility into the competitive landscape

   One key advantage of market intelligence is gaining visibility into the competitive landscape. Understanding your competitors’ strategies is crucial for positioning your hotel effectively in the market.
   
   Market intelligence tools provide a clear view of competitor pricing and promotions, allowing you to anticipate their moves and adjust your own strategies accordingly. This foresight helps you identify opportunities to differentiate your offering and stay ahead in the market, as the President Hotel successfully did.

2. Leverage predictive intelligence for better demand forecasting

   Another essential benefit is leveraging predictive intelligence to better predict demand in your market. Accurate demand forecasting is at the heart of revenue management. Market intelligence tools equipped with predictive analytics enable you to anticipate market trends and changes in demand with precision.

   By understanding pre-booking search intent and market conditions in advance, you can optimize pricing and inventory, to capitalize on peak periods. As Corné Serfontein, Deputy Commercial Manager at The President Hotel, notes, ”Without these tools, it would have been far more difficult to understand the shifts in the market and be as dynamic with our strategy.”

3. Ensure a swift response to sudden changes in demand

   Finally, market intelligence enables an agile response to sudden demand shifts. Unexpected events, like major concerts or sports events, can significantly impact hotel profitability. Market intelligence provides real-time alerts and up-to-date data, so you can respond to peaks of demand before your competitors with appropriate pricing and promotional activity.

Whether it’s adjusting rates for a sudden surge in bookings or avoiding the pitfalls of premature sell-outs, these tools ensure your hotel remains competitive and captures the right demand at the right price, as seen with Taylor Swift’s Eras Tour to Europe and the Paris Olympics.

Lighthouse market intelligence: empowering revenue managers

As a revenue manager, you know firsthand how crucial it is to have accurate, timely information when making decisions that directly impact your hotel’s bottom line. Whether you’re holding firm on pricing during a busy season or quickly adjusting to unexpected events, having the right tools at your disposal can be the difference between simply keeping up and truly staying ahead.

With the Lighthouse commercial platform, you have one place to access all the crucial market intelligence data you need. You get real-time insights that help you see what’s happening in the market right now, so you can stay ahead of trends rather than just reacting to them.

The tools are straightforward and easy to use, alerting you to the information you need without wasting time. This means you can focus on making decisions that directly impact your hotel’s revenue - like setting the right price or identifying when to adjust your strategy without getting lost in a sea of spreadsheets.

And when you need support, Lighthouse’s best-in-class customer service is there to assist, ready to help whenever you need it.

The true value of market intelligence lies in transforming data into clear, actionable strategies that drive growth. Lighthouse empowers you to do just that, providing the tools and insights needed to make informed decisions that boost your hotel's revenue.

Ready to leverage market intelligence?

If you're interested in learning how Lighthouse can help you harness the power of market intelligence for your hotel, contact our team today. We're here to help you turn data into real dollars.