We have launched dynamic pricing for accommodations with 14 or more rooms and will shortly expand it out to smaller properties. Whilst forms of dynamic have been around for sometime they have been extremely expensive and out of reach for all but the big hotel chains.
Now that is changing and we are happy to be part of that development. Some might not be so familiar with the way it works, if that’s you then please read on...
With Dynamic Pricing you get some serious help with your rates and get filled up at the best possible price. You no longer have to guess what is going to happen in your area on a nightly basis. Even with all the experience and knowledge gained over time, adjusting prices manually is laborious and prone to error. For this reason many just set their rates and forget about it leaving so much to chance. Others spend days agonising over the best strategies, searching competitors and guessing what the best rates could or should be. None of this need be the case if you choose a dynamic pricing system that does it for you systematically and automatically updating all the time, adjusting so you win.
A sophisticated system of pricing your accommodation is primarily based on the demand for your location coupled with your current levels of occupancy, the pace you fill up and your base rate. All these feed into an algorithm that dynamically changes your prices to maximise booking revenue. These factors are unique to you, so whilst the algorithm brings rigour and science to your pricing, it does so to fit your individual circumstances. In other words, the system gets setup to work for you specifically and then just keeps working.
As bookings are made the system automatically adjusts, thinking about what rate you need to get the next room filled. These adjustments are calculated depending on the demand for that date and your occupancy.
Many accommodation owners have been pricing high, low and mid seasons for years. The idea that your high dates in winter/summer or weekend/weekday have a different price is far from new. What’s new is the technology of dynamic pricing which simply does the same thing again and again on a daily basis for nightly prices. The granularity and frequency of these price changes make your pricing better fit the conditions, leaving no money on the table.
When dates are highly sought after the price would go up and when guests are scarce the rate would go down. Doing this manually and constantly for every date in the future, all of the time, is impossible.
Constant fluctuations of availability in your area also make pricing difficult. Often you won’t even know what changes are happening in local availability, easily missing a sudden peak in demand and selling your best rooms at a lower rate than you should have achieved. On the other side of the coin, you might be lying empty when a slightly lower price would have achieved more revenue.
Control is a key factor in dynamic pricing, and you retain it by setting and editing your maximum and minimum prices whilst easily being able to override any suggestions the dynamic pricing algorithm sets for you. In reality, experience shows that you should become at least twenty percent more profitable when you allow a sophisticated system to take the strain of setting the daily fluctuations in your pricing.
In the past access to this sophisticated technology has been limited but that’s never stopped us before. We look forward to making dynamic pricing available to all of our accommodation owners, starting with larger properties.