Comparing your competitors' rates: how 30 minutes a month tells you if you are underpricing

Ask the owner of a small guest house how they arrived at their room rate, and the answer is usually a version of: "That is the price we set when we opened, and it has gone up a few times since."

That is not a bad method because there is too little arithmetic in it. It is a bad method because there is no external check in it at all. You do not know whether you are fifteen euros below the market or thirty above it — and both cost you money, just in different ways.

The good news: you do not need a rate shopper subscription for this. Half an hour a month and a consistent way of looking will do.

First: pick five properties, and keep them

The biggest mistake in competitor research is that people look at something different every time. One month you compare yourself with the hotel on the square, the next with a holiday cottage twenty kilometres away. That measures noise, not the market.

So build one list of five properties a guest would realistically weigh against yours. The criteria that matter:

• Same type of stay. A B&B with breakfast is not comparable with an apartment with a kitchen. The guest who wants to cook was never going to book you.
• Same travel distance to the same reason for coming. A station, a town centre, a beach, a nature reserve. Twenty minutes' difference is often already a different market.
• Comparable size. Two rooms versus fourteen is a different business with different costs.
• Comparable level. Judge by the photos, not by the star rating or the review count.

Put those five in a simple file with their name and the link to their page on Booking.com or Airbnb. That list should change at most once a year.

Check four dates, not "the price"

There is no such thing as the price of your competitor. There is a price for a given date, a given occupancy and a given moment of booking. So pick a fixed set of dates and use exactly the same ones every month:

1. A weekday night three weeks out — your ordinary, unglamorous midweek rate.
2. A Saturday six weeks out — your weekend rate under normal conditions.
3. A Saturday in high season or during a local event — this is where the biggest gaps show up.
4. A night four days out — your last-minute picture.

Always search for two people, two nights. Two nights matters: many properties add a single-night surcharge or do not allow one-night stays at all, and then you are comparing apples with pears.

Record the total, not the number on the tile

This is where it usually goes wrong. The amount displayed in a search result is rarely what the guest pays. Click through to the cost breakdown and note down:

• the rate per night,
• the cleaning fee,
• breakfast (included or separate),
• the tourist tax,
• whether the rate is refundable or not.

A neighbour who looks ten euros cheaper at first glance can, with a forty-five euro cleaning fee, actually be more expensive than you. For a guest staying two nights, the bottom line is the only figure that counts.

Also note whether their calendar for that date is still open. A competitor sitting fifteen euros above you and fully booked tells you something entirely different from one sitting fifteen euros above you with six weeks of empty nights.

What the numbers are telling you

After two or three monthly rounds a pattern appears. Usually it is one of four:

You are consistently at the bottom and always full. This is the classic underpricing case. If you sell out all season while the neighbours still have availability, you are leaving margin on the table. The correction does not have to be dramatic: start with weekends and high season, not with quiet Tuesdays.

You are at the bottom and not full. Then price is not your problem. Look at your photos, your description and your reviews first — that is where the brake is.

You are at the top and full. Do nothing. You have something the others do not, and you are entitled to charge for it.

You are at the top and empty. Dropping blindly rarely helps here. First see whether you can explain the difference on your page — or narrow the gap only on the dates that really matter, not across the board.

Two traps

Not everyone who is cheap is making money. There is always someone in your area renting below cost because they do not know their numbers, or clearing out empty nights. That price is not a benchmark, it is an emergency measure. If you average your five, drop the lowest.

Look at what you keep, not at the revenue you think you are missing. A direct booking at one hundred euros beats a booking of one hundred and fifteen through an OTA after commission. As long as you mix those two up, you are measuring yourself with the wrong ruler.

From figures to rates

Pricing research that stays in a file is wasted time. Agree in advance what you will do with the outcome. Something along these lines works well:

• More than ten percent below your comparison group on comparable dates, and those dates already booked with you? Raise the next, still-open weekends by five to ten percent and measure for two months.
• Still empty three weeks before a popular weekend while four out of five are full? Then something other than your price is going on.
• The whole group climbing sharply for a particular event or holiday week? Put those dates in your calendar before next year starts.

And do not change everything at once. If you raise your rates, adjust your minimum stay and change your cancellation policy in the same month, you will never know which lever did the work.

Where BedFlow PMS fits in

BedFlow PMS is not a rate shopper and does not pretend to be: it does not collect prices from your neighbours. What it does do is make the other half of the comparison reliable — your own side.

Per period you see your occupancy, your average daily rate and your RevPAR, and per channel what actually remains after commission. Decide to raise a rate and you change it once; it goes out to all your channels at the same time, instead of being retyped in four different extranets. The settings are covered in the documentation.

In short

Pick five comparable properties and keep the list. Measure the same four dates every month, always for two people and two nights. Record the total including cleaning, breakfast and tax, plus whether they still have availability. Compare that with your own occupancy, discard the outlier at the bottom, and decide in advance what you will do with the result.

Half an hour a month, and you never have to guess again.

Want to see your own occupancy, ADR and net revenue per channel side by side? BedFlow PMS is free to try for 30 days, no credit card required — and the pricing is right there on the site.