How to Leverage Competitive Data for Smarter Hotel Pricing in 2025

Key elements in developing a pricing strategy that maximizes hotel revenue.

Smarter pricing is key to staying competitive — and competitive data is your secret weapon. With new technology, shifting guest behavior, and volatile market conditions, hotels that make pricing decisions based on real-time competitor and market intelligence can drive stronger results and stay ahead of the curve.

Here’s how to leverage competitive data effectively in 2025:

1. Understand Your Competitive Set Deeply

Start by clearly defining your compset. Go beyond location and star rating — consider traveler segments, booking windows, amenities, and positioning. Tools like STR, LightHouse, and CBRE reports can provide a fuller view of how your direct and indirect competitors behave across key metrics like Average Daily Rate (ADR), Occupancy, and RevPAR.

A strategic compset analysis should be ongoing, not a one-time activity. Traveler preferences, branding shifts, and renovation updates may change who you’re truly competing with.

2. Track and Maintain Rate Parity

Guests shop across multiple channels — so inconsistencies in pricing can erode trust and reduce bookings. Use channel managers and rate shopping tools to monitor not only your hotel’s rates across OTAs, brand.com, and wholesalers, but also your competitors'. Ensuring rate parity is still critical, but you can also identify where competitors are breaking parity and capitalize with targeted offers or meta-search visibility.

3. Monitor Competitor Behavior and Booking Trends

Use market intelligence tools to track competitor activity. Are they running flash sales on OTAs? Are they increasing rates during specific events or weekends? Combining this data with internal demand forecasts allows for smarter pricing actions.

In 2025, with events returning at scale and consumer demand fluctuating around travel trends, understanding real-time booking patterns is more important than ever.

4. Utilize Real-Time Benchmarking and Forecasting Tools

Platforms like Lighthouse, Amadeus Demand360, and RMS tool help benchmark your hotel’s performance and spot trends early. They also enable you to forecast more accurately by layering forward-looking data such as future occupancy and search intent.

Integrating competitive data into your revenue management system (RMS) empowers your hotel to pivot faster, particularly when demand shifts suddenly due to macro events or competitive promotions.

5. Focus on Value Creation, Not Just Undercutting

Competitive data doesn’t mean you need to race to the bottom on price. Instead, understand how to position your rate in line with perceived value. Use insights to elevate your offerings — maybe you’re the only hotel in your compset offering flexible cancellation, complimentary breakfast, or tech-forward amenities.

With today’s travelers often willing to pay more for convenience, personalization, or sustainability, clearly articulating your value proposition is essential.

6. Adopt Dynamic Pricing Powered by AI

Dynamic pricing is no longer a trend — it’s the standard. AI-driven RMS tools use competitor data, booking pace, local events, and market demand signals to adjust your rates in real-time. This automation ensures you're always aligned with market conditions without manual rate changes.

These tools also help you avoid knee-jerk reactions — such as dropping rates unnecessarily when competitors do — by giving you the context to make better strategic choices.

Conclusion

In 2025, leveraging competitive data is no longer optional for hotels — it's mission-critical. By understanding your compset, monitoring rate parity, using real-time insights, and applying AI-powered tools, you can develop a pricing strategy that maximizes revenue and aligns with guest expectations.

Hotels that embrace these data-driven strategies will not only compete effectively but also capture greater market share in a highly competitive, tech-enabled landscape.