My Revenue presents Study of the Evolution of rates in hotels in Lima and Callao
85% of the hotels in Lima would be open by November 2020. Average rates have been reduced by 10%, 8%, 7% for the months of September, October and December
My Revenue, in collaboration with abanZa, carried out an analysis of the online rates of hotels in the Lima and Callao region in two periods of 2020 to see their evolution just before the pandemic and in the months of September to November. the evolution of how many have reopened.
Comments Xavier Cardenas Co-founder and CEO of My Revenue “Our mission to help hotels in the optimization of income through Revenue Management practices, where we always see that if hotels have adequate information it leads them to make better decisions, that is why We are always conducting studies that allow them to be more informed and make better decisions, in this particular case we saw the importance of a pricing study that will show the current situation of the Lima market and the changes that have resulted from COVID-19, to bring to the hotels to reflect on whether the decisions they are making regarding prices are adequate for the sustainability of their business in the long term. "
The technical data sheet of the study was as follows:
A total of 223 hotels in Lima and Callao from 3 to 5 stars were studied, both from international brands, Peruvian chains and independent.
The evaluated hotel rates were obtained from OTA Booking.com
The rates of two periods were analyzed on the one hand from February 15 to March 15 and on the other the months of September, October and November 2020.
The collection of rates was carried out on August 20, 21, 22, 23, 24, 25 and 26, 2020.
This study evidenced a drop in the average rates of the hotels analyzed in Lima, which at the same time is one of the cities with the least impact on average rates in Latin America.
During the first 15 days of quarantine in March, all the hotels analyzed had their doors open. However, currently, in September only 75% of these hotels are still open. This as possible responses to the management of hotels in the face of quarantine restrictions and government guidelines. The study also projects according to booking.com for October and November the number of open hotels, of the study, will increase to 85%.
General situation of hotels in Lima
In Lima, taking as a reference the rate of 1 night with breakfast for two people, the hotels were analyzed and a drop in prices could be observed in September, October and November, with respect to the panorama in February and March of 2020 that it oscillated in 93 USD, getting to be reduced up to 10% less. It is important to note that a low season period such as February and March is being compared with a high season in the corporate segment that covers the months of September to November.
In general, all hotels in Latin America have the same problem, they seek to stimulate demand by reducing prices and, with this, price wars have been evidenced that fight for minimum demands and whose only result is to further harm the reality of hotels .
At the district level
In Miraflores, the district with the highest number of hotels analyzed (110) and that has a mix of tourists and corporate travelers, there is an oscillation between US $ 86 in February and March, passing through US $ 85 in September and reaching US $ 87 in November. .
In San Isidro, a district with 38 hotels analyzed and focused on corporate clients, they fall from US $ 121 in February-March to US $ 103 in September and recovering up to US $ 108 in November.
In the other districts, different behaviors are seen with cases of pronounced drops and others with prospects of improvement in the evolution of rates.
Variations in rates by day of the week
In the evolution of rates by day of the week, the study showed a clear opposition to the oscillation in prices before the pandemic and the months from September to November.
While before the pandemic, a greater variation in business days could be observed between rates ranging from 92 - 96 USD, the opposite is the case in the months of September to November because now they are the weekends with the greatest oscillation. And also on business days they present a flat rate.
Xavier Cardenas comments “From MyRevenue we have always ensured that hotels carry out proper Pricing management that goes beyond just lowering prices, since it has been shown in several studies that the only thing this brings is in the medium and long term is a decrease in profitability since the decrease in prices is not offset by an increase in demand, especially in times of recession where demand is not necessarily triggered by price, but by external factors. "
Concludes the Co-founder and CEO of MyRevenue “Our invitation is for hotels to make strategic pricing decisions looking at the medium and long term, and actions that generate more demand beyond price, otherwise the consequences for the market will be very harmful since It not only faces a decrease in demand, but also a decrease in prices; that in the medium term it will not even favor the guests as they will begin to perceive a deterioration in the service provided".