The proliferation of social media and mobile technology is increasingly pushing the hotel industry toward a dynamic, customized pricing model informed by big data and delivered to each unique customer through one-to-one marketing.

　　The proliferation of social media and mobile technology is increasingly pushing the hotel industry toward a dynamic, customized pricing model informed by big data and delivered to each unique customer through one-to-one marketing. But just because the tools are now more readily available to sell—and specifically, price—hotel rooms individually for every guest, numerous obstacles remain, particularly the ever-present pressure for rate parity levied by OTAs.

　　Still, few disagree that it’s where the industry is headed. As much as hoteliers hate to view their products as commodities marketed strictly according to price, the truth is that with pricing so transparent these days, booking a room based purely on cost has now become ingrained in consumer behavior. The convenience and access to greater information that technology provides has only accelerated this evolution.

　　"As mobile technology extends the cycle to dream, plan, shop and book—so it can be any place, anywhere—that’s going to put more and more pressure on the different channels to make sure their price is competitive,” said Norm Rose, senior technology and corporate market analyst for research firm PhoCusWright. “It’s changing the dynamics of pricing. The idea that we’re actually in a mode where pricing could be unique is also part of a bigger trend of personalization. It’s really designed to increase customer loyalty, get a greater share of the customer wallet, and is spreading throughout the travel ecosystem as a major trend.”

　　Overcoming rate parity

　　Today, travelers are almost always connected, during every stage of the journey, so it’s a no-brainer to have a personalized conversation with the guest during the stay cycle. It seems only natural that such an interaction would involve customized pricing, too, but it’s more complicated than it seems, according to hoteliers. For one, there’s little leeway anymore for revenue managers to play with room rates, between their contracts with OTAs and concerns over competitive positioning.

　　"We run into rate-parity issues with all the OTAs and everybody else. Our hotel group doesn’t really play a lot with rates short-term, because of the rate parity issues. The OTAs will come and get very mad at us,” said Wendy Norris, corporate director of revenue & e-commerce for the Valencia Group. “You don’t want that [discounted] rate out to the public. You don’t want to hurt your rate integrity. If it’s on a public device, anyone can find it, and your competitors can also see what you’re doing. They’re watching you.”

　　The answer to the problem may be found within mobile, and its potential for unique, personal interaction. While every hotel company may not have the luxury right now of developing their own custom mobile app, one of the likely future advantages of such an app will be the discretion it offers hotels looking to market—and price—rooms on the fly. Since the rate offer sent to an individual through an app would not be published publicly online, there’s not the same level of risk of violating rate parity agreements or alerting competitors.

　　"The mobile app does increase our viability to do the one-to-one marketing,” said Jimmy Suh, SVP of e-commerce distribution for Loews Hotels & Resorts, which is currently developing a branded mobile app that will feature push notifications and various special customized offers sent to guests. “It does increase the barrier or private aspect of it, which is also driven by our utilizing social media.”

　　Another workaround has been use of the social media app FourSquare, which uses a mobile device’s geolocational ability to track and interact with the user wherever they may be. Users “check-in” at different locations with the app, which in turn allows operators to market straight to the customer while they’re on-site. This may frequently be a food or drink deal or similar incentive, but room rate discounts can be offered as well, and it’s a decision often made at the property level, where less rate restriction exists.

　　"FourSquare is really property-dependent, so it’s not something from a brand standpoint that we have isolated and tried to make consistent across all our properties, just given the different types of outlets each property has,” said Piper Stevens, director of social media for Loews Hotels & Resorts. “We’ve allowed our hotels to create their own strategy and try to bring consumers into their hotels as they need to, or if they have some shortfall for the month.”