Dynamic Room Type Pricing: a flexible decision support tool to help you efficiently maximize top-line revenue
Dynamic Room Type Pricing: a flexible decision support tool to help you efficiently maximize top-line revenue
Dynamic Room Type Pricing gives revenue managers what they need to price each room type based on the perceived value of the room type, the guest’s willingness to pay, and dynamic demand and availability indicators. It allows you to capitalize on every opportunity across your business and provides a flexible decision support tool to help you efficiently maximize your top-line revenue.
An effective revenue management strategy begins with sound forecasting and carefully planned pricing tactics, but pricing down to a room type level requires much more than just that. By analyzing historical data points, customer insights and current supply and demand factors, Dynamic Room Type Pricing gives revenue managers opportunities to make more informed yielding decisions and capture their hotels’ total revenue potential. Additionally, it allows you to automate your pricing strategy based on supply and demand changes – if this was done manually for a hotel with 40 room types over a 90-day horizon, it would require 3,600 decisions to be made each day!
Used in combination with other features in guestrev, the all-new Dynamic Room Type Pricing allows you to right-size your tactical pricing relative to demand and alerts you when there is opportunity to adjust your room rates. It offers the flexibility and control revenue managers crave while still providing quick and insightful data-driven recommendations.
Benefits from Dynamic Room Type Pricing
The unwavering accuracy of our algorithms gives you the confidence to provide precision pricing for every guest. Hotels using Dynamic Room Type Pricing can typically expect to see an average revenue lift of 1.0 to 1.5 percent.
- Configure rates based on room types vs. room categories
- Eliminate static modifiers to accurately value each room type
- Mitigate any risk of over or under pricing at a room type level when pricing based only on total hotel demand and availability dynamics
- Reduce the occurrence of free upgrades and entice your guests to pay an upcharge instead
- Capitalize on lost revenue opportunities
- Make quick rate decisions with automated data processing
- Even with reduced demand, Dynamic Room Type Pricing will adjust to the current circumstances by recognizing opportunities to yield at a room type level
Practical use cases for Dynamic Room Type Pricing
Featured example #1:
- You’re forecasting your hotel at 75% occupancy for a future date. However, you do have a small corporate meeting in-house and they’re occupying several of your Junior Suites. Dynamic Room Type Pricing will identify whether you have the opportunity to raise the modifier on your Junior Suites even though you are not forecasted to fill to your hotel’s total capacity.
Featured example #2:
- You have a room type with a view that you figure is worth at least a $30 upcharge. However, guests aren’t really paying the premium and instead you are forced to upgrade them free of charge in order to fully utilize your rooms. The Dynamic Room Type Pricing algorithm will recognize that guests are not finding value in this room type and will recommend a $15 dollar upcharge instead. Even by lowering the modifier, your hotel begins to capture greater revenue as fewer guests are being upgraded for free and more are paying the additional $15 for the room with the view.
Featured example #3:
- As a hotelier, you still understand the value of your room types relative to one another. Dynamic Room Type Pricing gives you the ultimate flexibility to ensure that certain room types are never priced less than others, and even allows you to set a minimum difference between them to reflect the perceived value. Then, if the recommended price on one room type goes up, the price on the second room type will automatically increase along with it, in order to preserve that relative price difference at all times. Or alternatively, you can let every room type price float completely independently from the rest!
Fixed pricing is a thing of the past. Dynamic Room Type Pricing allows revenue managers the ability to configure rules based on historical data and guest insight, altering individual room type rates based on a set of circumstances.
If you’d like to learn more about Dynamic Room Type Pricing and how RMS can help you, schedule a demo today!
