What is dynamic pricing?
Dynamic pricing also known as real-time pricing is simply a competitive pricing strategy for businesses in a saturated market. The process requires accommodation providers to set flexible prices, which will be varied based on consumer supply and demand at the same time as assessing market fluctuations. Dynamic pricing for accommodation providers is an effective support tool for revenue and yield management maximization by having the ability to adjust prices on the fly.
Why is it important for accommodation providers?
Unlike small accommodation providers large hotel chains and groups have been practicing dynamic pricing for years; they have assigned teams of people who monitor the market and trends. They are continually adjusting prices in real-time to suite market demand.
So, what are the three common mistakes accommodation providers make?
1. Basing Prices the same or lower than their competition
2. Not varying rates on weekends
3. Not varying rates at all
In order to compete in a competitive environment Accommodation Providers should; set prices for each individual night instead of using a predetermined single price, in order to maximise returns prices should also be different on weekends, holidays, high and low seasons etc.
New tools are now available to the hotelier that for the first time enable prices to vary automatically based on supply and demand.
Other service industries have begun to embrace the power of real-time dynamic pricing based on supply and demand; two notable examples are Uber and AirBNB, with both companies announcing this functionality in numerous press articles recently.
So what can the independent hotelier do to compete with dynamic pricing?
Great news, dynamic pricing is now available for the independent hotelier!
Allotz Autopilot allows independent hotel owners and operators to fully automate the Yield Management process in real time based on supply and demand therefore, never having to worry about manually varying their rates again.
So what can you do?
Contact Allotz.com for a FREE demonstration. We can show you how to increase your net profits for less work.