What is the definition of Demand-Based Pricing in the hotel industry?
In the Hotel Industry, prices for services do not have to be eternally set. They can be used to, depending upon how many rooms, meals, etc. are wanted by consumers at any a specific time. This is what Demand-Based Pricing is all as regards – the value of something alters depending upon how much demand there is for it at a known time.
So, you can see that Demand-Based Pricing offers a lot of elasticity to hotels and other types of commerce in the Hotel industry, which can only be a good thing!
The economic ‘law’ of supply and demand is straightforward and worldwide. When managing income, making a price strategy Demand-Based is necessary – a hotel can alter its room rates at diverse times of the year, in its place of always being frustratingly trapped at one pricing level.
When demand is high, prices typically increase. When demand is low, prices typically decrease.