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What is dynamic pricing for hotels?

Dynamic pricing refers to the practise of adjusting room rates based on real-time market conditions and a whole range of factors that influence supply and demand. Instead of offering fixed prices, hotels use dynamic pricing algorithms to determine the optimal rate for a given time period or booking situation. These algorithms can be tuned for many factors such as temperature, number of flights, etc.

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The benefit of dynamic pricing for hotels

The main purpose and benefit of dynamic pricing for the hotel industry is that it allows hotels and B&Bs to maximise revenue, occupancy and overall profitability by striking the right balance between supply and demand. It allows hotels and B&Bs to adjust their pricing strategies in real-time so that rates are competitive and reflect market conditions. 

Dynamic pricing gives hotels and B&Bs the option to react very quickly to changes in demand. For example, during peak seasons or periods of high demand, hotels can raise their prices to take advantage of higher demand. Conversely, during periods of low demand, they can lower their rates to attract more bookings and maintain high occupancy rates.

How exactly does it work?

In practise, you are going to analyse a range of factors such as historical booking data, current occupancy rates, seasonal trends, local events, competitor rates and even external factors such as weather forecasts or economic indicators. 

You can do this the "old-fashioned way" by manually adjusting your prices depending on the previously mentioned factors or you can use digital tools that run fully automatically. 

It is important to note that dynamic pricing can lead to fluctuating rates, and customers may see different prices for the same hotel room depending on when and where they book. 

Again, the credo applies: 'To be seen is to be booked.'

It should come as no surprise that travellers predominantly search for their accommodations digitally, via their laptop, tablet or smartphone. OTAs such as, Trivago and you name it, have become indispensable to travellers. So your accommodation is listed among every other one in the area. Moreover, the majority of hotels today already work with dynamic pricing so you hardly make any impact by just adjusting your prices dynamically—and certainly not if you are on page 5 of the search results! 

In fact, studies show that 75% of people book stays in the first 15 views on an Online Travel Agency (OTA) and even estimates that 80% to as much as 90% of bookings made come from the first two pages of the listing. In other words, your visibility and position on these online travel agencies (OTAs) largely determine the success of your hotel or B&B - even if you use dynamic pricing. 

So today - more than ever - it is more important to be seen at the right price!

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How can you achieve optimal results with dynamic pricing?

So it's clear: it's all about showing the right price to the right traveller at the right time. And to use this to your maximum advantage, you need to be present and maximally visible on OTAs, online travel agents. Our motto is "to be seen is to be booked".

To really use the potential of dynamic pricing to your advantage, you need in-depth knowledge of how these platforms and OTAs work and how customers behave there. For example, you need a good understanding of how pricing algorithms work on OTAs, how search results are generated and what factors influence a customer's decision to book a particular accommodation.

And let that be exactly where we can help you!

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Otamiser is a Game-Changer in Revenue Management for Hotels

Smart Hoteliers Bet on the Perfect Mix of Online Visibility and Revenue Management

Otamiser gives hoteliers and property managers more bookings at the right price through online visibility as well as revenue management. The OTA's algorithm no longer holds any secrets for us. Or, as a major player in the hotel sector once introduced us to his business partner: ‘These guys hacked the code of’

The always right price with Otamiser Revenue

Always show the right price, to the right customer, at the right time by using dynamic pricing. This way you are not only optimally findable but also super attractive to every guest!

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