What is Dynamic Pricing?
Dynamic Pricing, often referred to as-demand based pricing is a budgeting strategy or a revenue management for hotels under which hotels businesses set variable prices for the products or service they offer. Hotels are now equipped to change the price of their inventory based on advanced learning algorithms that take into account various internal and external factors.
- Boost revenue upto 10%
- Adopting data based decision models
Digital infrastructure has dominated various industries in today’s world. Today, approximately, 52% of firms work to enhance their sales efficiency online, which impacts the revenue for about 36% of these firms.
The concept of Dynamic pricing has been into multiple sectors including railways, aviation etc. and is now expanding its wings to hospitality industry. It simply refers to the alteration of prices of inventory in accordance with various standards, namely cost, demand, competitor prices and objective margin. Often used to manipulate profits by various sellers, it has worked wonders for several Hotels websites.
Today, hotels and revenue manager has few buckets of prices to pick from while placing their inventory price, the dynamic computation of pricing system has led them to have multiple buckets by moving along from a opinionated path to real-time pricing standards.
In order to accomplish this task, Nodal take into account a number of factors including current bookings statistics, market research and historical occupancy data of the property etc., all of which is supplied to a machine learning algorithm.
The best way to test the claim is to:
- Market Research: This gives us the regional prices of properties in target region.
- Occupancy matrix: It imparts both metrics of historical and current occupancy.
The concept is to realize that in order to boost your revenue, clubbed with personalized price recommendations and maintaining the competition is foremost. The key is to work on Intelligent systems that work towards maximizing revenue by adopting a data-driven plan that eventually reduce manual work of putting up the optimal price for your hotel business.