Revenue management, answered

Should I price against local hotels, and what does it mean when they cut their rates?

Hotels are a relevant demand signal, not a direct competitor. Monitor their rate movement as a leading indicator of local compression or slack, but price your portfolio on its own value drivers: space, kitchen, privacy, and group capacity.

By Jack Murphy, Head of Revenue Management at UpRev. Running pricing for US vacation rental managers since 2017. Last updated September 1, 2026.

Why Hotel Rates Matter to Your Pricing Strategy

Hotels set rates based on their own cost structures and brand tiers, which rarely map cleanly to vacation rental value. What they do reveal is how local demand is tracking. When hotels are sold out or raising rates, that confirms compression you should already be capturing. When they are discounting, it signals softening demand you need to respond to before your calendar stalls.

What Hotel Rate Cuts Actually Signal

A hotel cutting rates usually means their booking pace is behind target for that window. That is a warning sign, not a reason to match them dollar for dollar. Your response should be a pacing review first: check your own pickup rate against historical norms before touching price. If your pace is healthy, hold your position. If your pace is also soft, tighten the gap to the lower end of your comp set, not to the hotel floor.

Building a Defensible Pricing Reference Set

Your primary comp set should be other vacation rentals that match your properties on bedroom count, location tier, and amenity profile. Layer hotel data in as a secondary market health indicator. Review both on a weekly cadence so rate movements in either channel inform your decisions without dictating them.