Price smarter, earn more: Winning tactics for dynamic pricing

With guest expectations shifting and booking patterns harder to predict than ever, more and more accommodation providers are turning to dynamic pricing to stay sharp and competitive. This flexible, data-led approach allows operators to adjust rates in real-time, responding to changes in demand, local events, competitor activity, and occupancy levels as they happen.

Globally, dynamic pricing is changing the way hotels think about revenue. A recent 2024 report from Hotel Tech Report found that properties using automated pricing tools saw revenue gains of up to 20 per cent. Closer to home, Australian operators are catching on quickly, embracing AI-powered platforms to help refine their rate strategies across OTAs, direct bookings and wholesale channels.

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To find out how operators are putting this into practice, AccomNews caught up with RoomPriceGenie and Switch Hotel Solutions.

What are the benefits of dynamic pricing and how can it increase revenue?

RoomPriceGenie: Dynamic pricing gives accommodation providers the flexibility to respond in real time to changes in demand, booking pace, and seasonality. Rather than relying on fixed seasonal rates, hotels can adjust prices daily, or even hourly, based on current market conditions. This helps maximise occupancy during low-demand periods and capture higher rates when demand surges.

Chris de Closey, director of Switch Hotel Solutions: Dynamic pricing allows hoteliers to maximise their revenue for the limited rooms available. It allows you to maximise your revenue in the busy periods but drive occupancy and bookings in the lower season periods. You can get the best profit result for your business with dynamic pricing. It’s exactly like an airline; you don’t expect to fly at peak times for the same price as a 6 am flight—your business needs to be treated the same way.

How are hotels and other accommodation providers using data to boost revenue?

RoomPriceGenie: By analysing booking trends, pickup patterns, competitor rates, and guest behaviour, hoteliers fine-tune pricing, tailor promotions, and optimise distribution. Many properties now use revenue management systems that connect to their PMS and channel managers to gather this data automatically, turning it into clear, actionable insights that drive profitability.

Chris de Closey: Data is the one thing that helps dynamic pricing THRIVE! Data allows operators to analyse the trends, identify gaps within the market then make informed decisions that will get them the best possible result. You can use any range of data, but don’t get caught up in it and have decision paralysis! You are best to analyse, implement, review the strategies and then optimise. Analysing, then testing and learning is the best way to use your data to get a great result.

What role does AI play in modern-day revenue management systems?

Ari Andricopoulos, founder, RoomPriceGenie, said: AI isn’t typically used to power pricing algorithms because they are already highly sophisticated and reliable. AI can be helpful as an aid to the user, allowing them to set the right strategies, notice anomalies, feel more comfortable with the software, and generally improve revenue performance. When used correctly, it can make pricing more robust and the user experience fuller and richer.

Chris de Closey: AI allows our operators to make even more informed decisions, the speed to implement strategies is significantly reduced, which allows for more strategies to be tested. Don’t just rely on AI, though, whilst it is a fantastic tool, you still need to input your know-how and nuances into the systems to get the best results.

How can hoteliers ensure the correct balance between OTAs, direct bookings and other platforms?

Hayley Armstrong, Senior Revenue Manager for APAC at RoomPriceGenie: Understanding your distribution channels and using them strategically is essential for effective revenue management. One important step is to review and understand your actual cost per acquisition. While direct bookings are often the preferred option, they still come with associated costs, such as website maintenance, payment processing, and marketing.

For smaller properties with limited marketing budgets, OTAs can actually be a more cost-effective way to expand your reach. Rather than viewing them as a necessary evil, consider how they might complement your existing strategy. Use this information to shape a smarter, more balanced distribution plan that reflects where your marketing dollars will have the greatest impact.

Chris de Closey: By ensuring that you develop a revenue strategy for your business that optimises all your available channels, not just direct or the OTAs. Everyone will always preach direct is best, and it is, but don’t do it at the behest of the online agents. At the end of the day, the goal is profitability, and you can do so by driving significant volumes through all channels with the right strategy.

In your experience, what are some of the most effective revenue-boosting tactics that accommodation providers often overlook?

Hayley Armstrong: Use technology to optimise and automate your revenue management. As revenue managers and operators, we can be hyper-aware of our rate strategies for the immediate one to two months, but it is easy to lose sight of the rest of the year. This is where the most opportunity lies, and you will be surprised how much of a difference it can make to your revenue results when you start optimising dates from the outset. By using a solution to assist with the manual work, you can shift your focus to more strategic decisions.

Chris de Closey: Accommodation providers need to ensure that they are analysing their market. Ensure you are pricing your property correctly against your competitors (and choose the right competitors too), and utilise dynamic pricing tools to ensure your business is optimising the pricing even when you are sleeping!

This article features in the new winter edition of AccomNews. Read it here…