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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


Obstacles to Dynamic Pricing

Large hotels and chain properties have practiced dynamic pricing for decades now. Why have smaller, independent properties been so much slower on the uptake?

At RoomPriceGenie, we speak with hundreds of passionate, hardworking hoteliers every day, and we know it’s not due to lack of awareness or will. Rather, it’s due to:

• Lack of sufficient time to monitor competitor rates
• Limited access to information about market conditions
• Uncertainty about when to change prices and by how much
• Fear of upsetting guests by pricing too high or too low
• Frustration with trying to manage dynamic pricing manually

Doing Your Best, but Still Leaving Money on the Table

Here’s what hoteliers are saying about dynamic pricing. Do these comments sound familiar to you?

“I was spending so much time manually updating our pricing, but we were still leaving a lot of money on the table. Sometimes, demand was high but our rates were low. Other times, the rates were high and our demand was low. Pricing wasn’t optimized at all.”

– Purvi Patel, Owner
La Hacienda Inn, USA

Illustration of a hand dropping coins.

“Our strategy was always to start off at our lead-in rate which we wanted for each apartment and then lower prices closer to the time based on occupancy levels. However, this was very time consuming and, in some cases, didn’t always work in our favour.”

– Charlie Guest, Owner
Your Apartment, UK

“Getting around to updating our room pricing every day was a mission. On many days, we were too busy running the motel and just left the prices [as is]. We knew we missed out of revenue opportunities.”

– Emma Browning and Tony Reid, Owners
The Hanmer Springs Scenic View Motel, New Zealand

Is Dynamic Pricing Fair?

Another barrier to dynamic pricing is fear that guests will think hotels are engaging in unfair pricing practices or even gouging. However, a study from ZHAW School of Management and Law found that while hotels experienced significant increases in average rate and occupancy after implementing a dynamic pricing solution, there were no significant changes to guest satisfaction, perceived price fairness, or intention to recommend.

Dynamic pricing isn’t about taking advantage of travelers, it’s about charging market rates. Travelers expect to pay more when demand is high. (Have you booked a flight lately?) And they know it works both ways. When demand is low, they get better deals.

Aligning your hotel’s pricing with the market is not only smart business, it’s a customer-friendly practice.

Illustration of a plant growing in a pot.

“While I was initially uncomfortable about raising my prices, when I checked online, I was still the cheapest of my comp set by far. I found out pretty quickly that people weren’t shocked by my higher prices. Rather, they expected it. I realized at that point that I had been missing out on a lot of money over the past few years”

– Patrick Lexis
Hotel de la Bourse, Netherlands