What is the definition of Competition Based Pricing in the hotel industry?
The term competition based pricing, also known as competitive price refers to the procedure of a corporation valuing its product/ service (in hotels rooms, food & beverages) according to the contestant. Competition Based pricing should be piece of your Revenue Management Strategy
In industries which have come first in the commerce life cycle contest based pricing often forces smaller uncompetitive corporations into bankruptcy. In general, competitive pricing often happens when many companies are presenting alike products or amenities to their market. When this occurs and companies aren’t able to distinguish themselves from their competitors the last factor they can regulate to win consumers is price. Therefore, this type of pricing is rather a last resort – especially for hotels – as they should try to differentiate themselves by their contributions, whereby they can charge a premium for their service.