Hotel recommendations often don’t bear in mind the wild fluctuations in cost that dynamic pricing introduces. So how do we fix this problem?
A question. What’s the best mid-range hotel in? Or the best business hotel in Rome if you’re paying your own way rather than slapping it on a company expense account? Or the best accommodation for families in Los Angeles?
Chances are that if you ask 100 experts, you’ll get a range of answers, with a few properties coming up repeatedly. But if those experts were being honest, the answer would be: “Well, it depends.”
And it does depend. What may be the best option on one day is not the next day. This is largely due to what hotels like to call “dynamic pricing” and I like to call “a hugely annoying pain in the arse”. Room rates fluctuate wildly with demand. Advertised rack rates are rarely what are charged and the low season “from” rates that I often end up quoting after hunting online are rarely what you’ll end up paying either.
The actual cost of a room at Hotel X could be anywhere between £70 and £170. At £70, it may justify a recommendation as the best mid-range option. At £170, it almost certainly doesn’t.
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What we lack with such price scales is an idea of when it’s a good deal and when it isn’t. A review or recommendation rarely factors in what the room is actually worth. For example, a fair price for that room may be £100. Anything below £100 is a good deal, anything above, a bad deal. But without such a tipping point, a recommendation is relatively meaningless as the cost is so variable.
Let’s take two (fictional) good, recommended hotels. If Hotel X is priced between £70 and £170, while Hotel Y is priced between £90 and £190, how do you decide which is better value? There’s no indication where the fair price – the tipping point – on the scale is.
If both hotels happen to be priced at £100 on the day, then Hotel Y is obviously the better deal. But someone just seeing that price tag has no way of knowing this – they’ve no range of prices to compare it with.
It’s even trickier when Hotel X is £110 and Hotel Y is £120. Which offers better value? It’s hard to know without knowing what that that fair point on the scale is.
There’s a gap in the market for a hotel booking site that works to this tipping point principle. It’s one that requires a lot of legwork, and paying people to go round and assess the hotels. But if those assessors could establish what they believe to be a fair price for each hotel, then that information could be published alongside the price on the day. Then the hotels could be sorted according to the percentage saved on the fair price.
So, if Hotel X’s fair price is £100 and the price on the day is £90, it’s 11%. If Hotel Y’s fair price is £120, and it’s £100 on the day, it’s 20%. If Hotel Z’s fair price is £125 and it’s £105 on the day, it’s 19%. Hotel Y – just – wins.
In the meantime, that hotel I recommended the other day? The recommendation stands for when it’s the £60-a-night I paid rather than the £110-a-night I’ve just seen rooms going at today. Obviously.