Dynamic Pricing meaning in hospitality

Dynamic pricing is a hospitality industry strategy to price based on demand, market and other factors. This allows you to change your prices in real time to maximise revenue and occupancy. Unlike fixed pricing, dynamic pricing adapts to many situations, seasonality, local events, and competitor rates.

For hospitality professionals, dynamic pricing is a powerful tool to optimise revenue and stay ahead of the competition. You can make the most of high demand periods by increasing rates when rooms or tables are in short supply. Conversely, you can lower rates when it's slow to attract more customers and maintain occupancy. This flexibility allows you to respond to market changes and customer behaviour, ultimately increasing your bottom line.

Let’s say you run a busy restaurant in a seaside town. During the summer tourist season, you might use dynamic pricing to increase your menu prices by 15% on weekends and holidays when demand is highest. But on quiet weekday evenings in the off season, you could offer 20% off certain dishes to attract more locals. By pricing based on these factors, you can maximise your revenue all year round and keep your restaurant busy even during the slow periods.'