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How to capture more revenue with automated pricing

This guide – written explicitly for the independent hotelier – will explain the concept, strategies and benefits of automated hotel pricing. We’ll show you why automated pricing is the secret to capturing more bookings, higher room rates, and more revenue every day, even while you sleep. That is if you have time for sleep.


How to capture more Revenue with Automated Pricing Book Cover


How Does Automated Pricing Work?

While we can’t tell you how other pricing systems work, we can explain how RoomPriceGenie works. On the front end, the dashboard is deceptively simple. On the back end, however, the software’s powerful algorithm processes thousands of data points and performs millions of calculations to produce the right rates at the right time.

The process can be divided into three main steps:

1. Collect data: The software extracts pricing and demand data from internal and external sources.

2. Calculate pricing: The algorithm analyzes the data and runs calculations to produce optimal rates, adjusting them based on the hotel’s settings.

3. Update pricing: Rates are updated in the hotel’s PMS (or channel manager, if preferred).

All these steps are automatically repeated four to 12 times per day for each arrival date in the coming year or longer, depending on the hotel’s subscription level.


How Does the Software Make Pricing Decisions?

In the data collection stage, the software pulls information from a variety of sources, assigning it different weightings according to its importance to pricing.


These sources include:

• Internal hotel data from the PMS, including occupancy, booking pace, and booking window (days left to sell).

• External market data, including rates from the hotel’s competitive set, nearby hotels, and Airbnb (if relevant), as well as upcoming events and holidays.


Hotel Settings

A base price for the hotel’s entry-level room type is calculated from the average rate over the past year. It is then adjusted according to the above data inputs and the hotel’s settings. Hotel settings are input by the user and include minimum and maximum rates, occupancy goals, and preferred pricing aggressiveness, among other parameters.

Pricing for other room categories is derived from the entry-level room price according to the percentages or set amounts specified by the hotel. Additional rate plans, such as bed-and-breakfast packages and promotions, are derived from these prices.

All this data helps ensure your property is not only priced competitively, but that competitive advantages such as a prime location, superior amenities, or strong guest loyalty are priced in.


Auto-Pilot vs. Co-Pilot Mode

Hotels can also choose between Auto-Pilot mode, as described above, and Co-Pilot mode, in which the user can review pricing recommendations and make adjustments before uploading them to the PMS. In either mode, the hotel maintains full control over pricing settings and can override rates and set fixed rates if desired.

Illustration of a Globe.

“To stay competitive in today’s dynamic and growing market, it is necessary to react quickly to all internal and external influences. Internal and external demand as well as customer behavior play an important role in order to price dynamically.”

– Rafael Hollenstein, Manager
Hotel Rössli, Switzerland