Product Views: how many times a room/rate has been displayed (Part #1)

Hotel Revenue Analytics

This is definitely one of my favorite and most useful reports I worked on so far. Mostly, this report represents how the same information can provide different hints, by simply looking at it from different perspectives. And, therefore, it demonstrates how often our revenue actions might be misleading, just because we take into account a tiny little part of the entire scenario that, in reality, is way more complex than it may appear at a first glance.

Do we think it is right to take action simply based on our production performances?

Let’s have a look at this report:


Very basic report you can pull either from your PMS or directly from your booking engine, it shows the rate production by including a bunch of regular metrics like Number of Nights, Revenue, ADR, etc. (DR = Daily Rate (Best Available Rate), S1 = Special Rate 1, S5 = Special Rate 5, AH = Advance Purchase Rate 21 days Minimum Advance Booking Days, AH2 = Advance Purchase Rate 60 days Minimum Advance Booking Days, P1 = Package Rate).

If I had asked which rate performs better, it wouldn’t be difficult to assess that DR rocks!! Almost all metrics look better compared to other rates, so the natural conclusion we might come onto, is that DR is simply more appealing.


Now, let’s look into this second version of the same report:


Everything is exactly the same, same rates, same metrics.. just a couple of additional metrics to see how many times that rate has been displayed and, as a consequence, a newly invented metric that I called Product Penetration, which is basically the result of the number of times a rate has been displayed, divided by the number of times the same rate has been booked.


My assessment now radically changes: although DR gets more bookings, AH is the rate that seems to be more appealing, but despite that, most times is not displayed based on customers’ booking search criteria.

Product Penetration metric may be considered as a sort of Conversion Rate, but specific for products (rooms & rates). The higher it is, the more appealing a product is.

What action should I take?

Being Early Bird rates way more appealing than all other rates, a good thing would be to make AH and AH2 more accessible to customers’ views: basically, we want to make them more visible.

Specifically based on the above results, I would include an additional metric for each rate: the Booking Window, which is the time in days that elapses between the booking date and the arrival date.

The reason stands in the restrictions applied at both AH and AH2 rates, which are the 2 top producing rates. Early Bird rates require a Mininum Advance Booking Days to be booked, in the above example 21 and 60 respectively. At property level, the Booking Window will more likely be <21. This means that most times AH and AH2 do not show up simply because customers tend to book very late or last-minute.

As a matte of fact, this is the Booking Window report that clearly shows how most booking searches are done less than 21 days prior to arrival.


What does actually “appealing” mean?

Not necessarily and uniquely the price, but the value a customer gives to a product (Room and Rate combination) in terms of price, restrictions and conditions like cancellation and guarantee/payment policy.

With regards to the above scenario, a good idea would be either to offer an additional Advance Purchase Rate that involves a Minimum Advance Booking Days not higher than 14, but whose prices should be as similar as possible to AH rate.

See you soon for Product Views: how many times a room/rate has been displayed (Part #2).