In 5 years, most hotels will have dynamic pricing. This may seem like a bold statement, but to us at RoomPriceGenie, we see every day in our work how necessary it is. But getting prices right wasn’t always so straightforward. And this is why we created Intuitive Dynamic Pricing.
Why would all hotels benefit from dynamic pricing?
First, when guests go to book a hotel, they will often be comparing your hotel to other choices. With online travel agencies, like Booking.com, travelers are given a number of options to compare, and price is always an important consideration.
Getting the price right means making sure the right number of people book for your hotel. If you have 30 rooms and 60 people want to buy them, then you are too cheap and not making as much revenue as you could. And if only 15 people want to book them? Then it’s worse. But how do you find the right price to make the most revenue?
There is really no way to know in advance what your prices should be for your rooms. Demand for your hotel can change as world conditions change, as competitor prices change.
And then, put simply, when you have fewer rooms left to sell, you can charge more, but when you have more rooms left, you need to be cheaper.
You may be very good at setting your prices at the beginning of the year, but, as the year progresses, the conditions will change and your prices need to move to reflect that or you will lose revenue.
At RoomPriceGenie we typically see that when hotels switch to dynamic pricing they can see 20%+ increases in revenue.
What do you need to bear in mind for dynamically moving around your prices?
To get good pricing, you need to understand both how many people want to stay at your hotel (the demand) and how many rooms you have left to sell (the supply). Specifically, you should be looking at:
- Competitor pricing (hotels and possibly AirBnB)
- Pickup in bookings for your property (both for a night and for the season)
- Local events
- How many rooms you have left
As these factors change, so should your prices.
What is Intuitive Dynamic Pricing?
At RoomPriceGenie we recognise that the vast majority of hotels don’t have expert revenue managers to look after their pricing. But at the same time we want to make pricing of the quality that expert revenue managers love to use. We focus on getting the pricing right in the simplest way possible for any hotel from a 10 room B&B owned by retirees to a 150 room city hotel with a very experienced revenue manager.
We call this Intuitive Dynamic Pricing. It is the most universal, automated and, yes, intuitive pricing available. And we are very proud of it.
What is special about Intuitive Dynamic Pricing?
To be an intuitive pricing system, it is very important for the user that…
- It is robust. This means that it gets the pricing right without any supervision. If a pricing algorithm is to work for people who are non-experts, it needs to get prices right without needing approval.
- It is trusted. If you don’t trust an automated pricing system to put the correct prices in automatically then you will not have it on auto-pilot and you will lose a lot of the benefit. 95% of our hotels are on auto-pilot.
- It is transparent. No black boxes would work for most of our clients. How can people believe in a system that gives prices they don’t understand?
- It is easily controllable. The user needs to be able to control prices. More than that, once they fix a price once, it needs to keep calculating correctly in future.
- It is intuitive. Every single part of the RoomPriceGenie system has been built with the idea of making things easy to understand and use. We distill a lot of complex information into easy-to-use controls.
With all of these in place, we are ready to bring Intuitive Dynamic Pricing to the world. If you would like to see it in action please book an appointment here:
