The benefits of dynamic pricing
Learn about the concept behind dynamic pricing and why it is essential in a hotel business.
What is dynamic pricing?
Dynamic pricing also called surge pricing or time-based pricing is a pricing strategy of using flexible pricing for a product or service based on market demand.
In hotels the basics of dynamic pricing is quite simple: different hotel room types should be priced dynamically based on supply and demand. If you want to increase the level of granularity you should also consider your current pacing and hotel performance in real-time, as well as external factors such as competitor pricing and search pressure from the web booking engine.
As a Revenue Manager, to manually keep track of changes in all these data pillars, 24/7, is not possible. On top of that, to also decide exactly how these data changes should influence the room price in order to have the optimal price, is impossible without the use and support of technology.
One thing is for certain, if you don´t update your room prices often enough, revenue opportunities will be lost. Taking supply and demand into account, prices should fluctuate regularly if you want to maximize revenue. This pricing strategy is well suited in today’s market and is one approach many hoteliers are using. With today’s support of technology, revenue managers can update their pricing several times per day – even in real-time.
Why would dynamic pricing benefit my hotel business?
Modern hotel technology, like Atomize, can help you with dynamic pricing, in real-time, 365 days into the future. Atomize price your room types dynamically and independently of each other and at the same time make sure to never break any price hierarchy rules that you have.
Atomize Revenue Management Software gathers and displays market data in real-time, 24/7 to make sure you won´t miss out on even the slightest changes in the market. With competitive intelligence and self-learning algorithms, Atomize assess extremely complicated pricing data variables and automatically sets the room prices for you.