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Dynamic pricing sets itself apart from other pricing strategies in the hotel and tourism industry because of several important factors. In today’s fast paced, ever changing world, a pricing strategy needs to be flexible to perform at the optimal level. Real-time dynamic pricing ensures that the right room sells for the right price at the right time for the right person.
When it comes to hospitality, for example, multiple factors will determine the optimal price for a room to sell for. Seasonality and weather are ever-changing, competitor rates might rise and fall, special events like concerts or sports games can be unpredictable.
A fixed-cost pricing model would be leaving money on the table: therefore, we can conclude that the more factors play into a product’s price, the more dynamic pricing makes sense as a methodology for that product.
To put it simply: if you are a hotelier or even tangentially related to the tourism industry, you can’t afford to answer anything but yes.
Dynamic pricing is proven to optimize revenues, and increase occupancy and booking pick-up. In order to optimize prices, thousands of simulations and calculations must be run per day, forecasts must be derived, and prices must be updated to OTAs.
This can be a substantial workload for even the most grizzled revenue manager, but thanks to automation, implementing dynamic pricing has never been easier.
There are several options for Revenue Management Systems (RMS) out there. When deciding which one to employ, make sure you ask yourself the following questions:
HotelMinder, it is about:
HotelMinder, it is about:
Dynamic pricing works best as a pricing strategy when your product or service has many varying factors necessary to consider to determine an optimal price.
Responding to demand is the underlying principle of all the aforementioned pricing strategies, and dynamic pricing takes into account the greatest number of factors that add up to set room prices. When done properly, it is an efficient strategy that sets prices based on supply, demand, and other factors.
From its re-implementation thanks to airlines and large hotels, dynamic pricing has come a long way and, now thanks to automation, is accessible to hoteliers of all shapes, sizes, and economic backgrounds.
If you are a busy hotelier, you’d be foolish to ignore the benefits of a real-time, automated dynamic pricing platform. The more it can learn, the more you can benefit, sit back, relax, and watch revenues rise, bookings increase, and your business flourish!
Pricepoint is disrupting legacy hotel technology, by providing automated updates and pricing recommendations directly to OTAs with user notifications via our web or mobile app.
HotelMinder is a leading advisory agency for hoteliers to maximize business performance with hands-on advisory & project management services; a free and unbiased hospitality knowledge platform with Tech, Marketing, Revenue and Operational content; and a marketplace for professionals from all over the world to find hospitality specific software and services that best match their vision and requirements.
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