This article gives a brief overview of our dynamic pricing algorithm.
In understanding how our pricing solution works, you will be able to get the most out of it. This section is intended to give you an idea of the way we calculate your prices.
The following are the key factors we consider:
Market Intelligence
This is our external factor; thus, we look at what other hotels around you are charging. Here we have a slightly different approach compared to what you probably worked with in the past.
What is the philosophy behind it?
We aim to identify hotels which have similar demand patterns to yours and are doing great in their revenue management. Most often those hotels are larger than yours and usually have a full-time revenue manager employed. Revenue managers are looking out for events, checking the weather, and using the large amount of data they have to always set the best prices for their properties.
The hotels we identify may be different to yours in several ways. Yet, we are not comparing price to price or double room to double room. Instead, we care about how they change their room prices. How do the RMs estimate the market at any point in time?
Our philosophy: looking at 10 hotel experts will give us an indication of where the market is at any point of the year. And you will never miss out on what the experts think.
Yielding (or Optimisation)
Our internal factor is analysing the data we get from your property; occupancy and booking behaviour of your guests. For any date in the future, we ask ourselves how many rooms we sell and how many days we have left to sell the rest of the rooms.
We optimise this process, including your individual settings such as how aggressively you want to move your prices around.
For example, if you only have 2 rooms left to sell and a month to do it, we know you could charge more and still sell them as demand is high. At the same time when you have 30 rooms left for the upcoming weekend, you would need to decrease prices to make sure to sell more rooms.