The Price Is Right?

Once distrusted by travel buyers, dynamic hotel rates are finally getting hot
In the past, hotel negotiations worked like this: Hotelier set annual or seasonal pricing strategies and generally controlled inventory at these fixed rates. However more recently, there has been an industry movement by both major chains and independent properties toward a different structure – dynamic pricing.

“Instead of having fixed pricing levels that are set during budget season, hotels are now using complex revenue management systems that use predictive analytics to set pricing based upon the supply and demand of each day and room type and how competitive hotels are priced,” says Shannon Hyland, SVP global supply for RoomIt by CWT.

This has created a significant amount more volatility in how rooms are priced, as hotels are focused on optimizing top line performance and using sophisticated technologies to do so.

Alison Guilbeaux, director of business analytics at Yapta, defines dynamic pricing as a discount off BAR (Best Available Rate) instead of static rate (known as last room available, or LRA) at contract hotels.

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