What is the definition of Dynamic Pricing in the hotel industry?
Successful hotels around the globe aim for best possible productivity at all times. There are lots of stuff a hotel can do towards attaining this. One is for the Revenue Management Team to make Dynamic Pricing part of their overall plan. Consortia/discussed rates are no longer fixed (in some cases).
By connecting to the BAR, they now vary with any BAR change.
When it comes to Dynamic Pricing, the key is elasticity. Rooms within the same category at a hotel can be sold at diverse prices at different times – the price does not always have to stay locked.
So, how does a hotel know when to change the rate for certain rooms, or certainly, all of them? Well, the best way to do this is to closely monitor customer demand.
If you know how much need there is for rooms at certain times, you can then alter your prices to please those needs, at precisely the right moment.
The demands of the market, then, determine how room rates dynamically change. And this does not only apply to correcting room rates for individual consumers, couples or families.
Dynamic Pricing can also be factored into the management of assembly business bookings, i.e. when setting group rates and commercial rates.
Finally, if a hotel has a Membership Scheme, Dynamic Pricing can be used when generating a Member Rate pricing strategy. The cost of rooms and other in-house facilities can be dynamically changed, in accordance with room accessibility for Members and also the terms of each Membership package.