Dynamic pricing software for hotels: Everything you need to know
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Hotel data is more complex than ever.
When creating pricing strategies, small and independent hotels are under tremendous pressure to monitor demand trends and analyze competitor pricing, events, and availability, while still juggling the task of creating memorable experiences for their guests.
It’s no surprise that independent hoteliers are increasingly embracing a dynamic pricing solution to help ease this burden.
So what is dynamic pricing?
What is dynamic pricing?
Let’s refer to the Lighthouse Hotel Revenue Management Glossary for a quick refresher:
Dynamic pricing is one of the industry’s key pricing strategies [...] Here room rates aren’t fixed, but are adjusted based on market demand, competition, time of booking, customer behavior, and other factors that influence booking patterns.
Prices change dynamically using real-time data to optimize your revenue and maximize occupancy rates. This delivers the most accurate room prices for any given time, delivering better ADR or occupancy.
Dynamic Pricing is increasingly popular as it’s highly flexible.
The key to remember about a dynamic pricing model is that it is:
Increasingly popular due to its positive impact on key metrics and overall profitability
Highly flexible
Changes dynamically
Uses real-time data
Dynamic Pricing: Understanding the Algorithm
Now that we know what dynamic pricing is, let’s talk a bit about how it actually works.
Since a dynamic pricing system is constantly changing and adapting due to various inputs, it isn’t possible to implement a dynamic pricing strategy manually; therefore a dynamic pricing strategy must be powered algorithmically.
What exactly feeds the algorithms that make these complicated strategy decisions based on real-time data? While not an exhaustive list, dynamic pricing systems often look at variables such as events, demand trends and competitor pricing to name some of the most obvious factors.
A dynamic pricing system may notice that, for an upcoming event date, the hotel is priced at $80 under the average compset rate.
The system would identify this date as being a high opportunity and might determine that the rate should be increased from $249 to $349. Since the system makes changes dynamically based on these real-time indicators, the new price point is immediately pushed to the PMS, and pushed out to public channels, often via a channel manager.
How hotels use dynamic pricing
Hotels are increasingly using a dynamic pricing tool to get more time back in their day and to increase incremental revenue. Here’s are a few ways they are doing so:
Integrating the system with their PMS
By integrating a Dynamic Pricing tool with their PMS, hoteliers save time by not having to manually enter rates into their systems which can also be error-prone, instead having certain rate recommendations automatically sent.Setting automated pricing rules that fit the needs of the hotel
Every hotel is different, so hoteliers are utilizing dynamic pricing solutions that may only push rates on certain days of the week, or may only change rates when occupancy levels are above or below certain thresholds. This is done by configuring settings within the solution.Evaluating and fine-tuning the system
As hoteliers become more acquainted with their dynamic pricing tools, they are making adjustments to the systems, calibrating competitor weights, changing rate change increments, and adding emphasis to certain variables to make the algorithms most effective for their property.
Choosing a dynamic pricing tool for your hotel
Now that we know what a dynamic pricing system is capable of, let’s delve into the qualities of high-quality dynamic pricing systems. These are the attributes that you should look for when shopping for a dynamic pricing system:
Data behind rate recommendations should be transparent
If a dynamic pricing system recommends a rate change (for example, raising the rate from $149 to $199) the system should explain exactly what variables led to this decision. A good dynamic pricing tool will explain in plain language exactly why the decision was made.
2. Highly customizable, allowing the user to turn over as much, or as little control as they feel comfortable with.
A hotelier should have the option to only allow automated rate changes in certain scenarios, for certain days of week, or to only change rates in certain increments. This level of customization allows hoteliers to operate within their comfort zone while also enjoying the benefits of utilizing a dynamic pricing system
3. Easy to learn and master
An effective dynamic pricing solution should have user-friendly dashboards and be easily discernible for users, even if they have no prior revenue management experience. There should also be robust training resources available in case users need support.
8 Best dynamic pricing software options for hotels
Now that we have a better grasp on what exactly dynamic pricing is, how these systems work, and the qualities of good dynamic pricing systems, what are the best solutions out there for hoteliers to consider when evaluating different dynamic pricing systems currently on the market?
1. Lighthouse Pricing Manager
The Lighthouse platform is trusted by 65,000+ hoteliers worldwide
Pricing Manager is best suited for small, independent hotels.
Key Features of Pricing Manager:
Settings are customizable and can be fine-tuned to meet your needs, along with the option to override price recommendations, so you are always in control.
The option to set Autopilot - instantly sending certain recommendations and maximizing your time
Pricing Manager analyzes both internal and market data, including pickup rates, occupancy forecasts, and competitor rates. The outcome? Optimal pricing for your hotel. And you always have control-easily adjust pricing rules as you see fit in the settings.
Using Pricing Manager is a breeze, even if you don't have prior Revenue Management experience, thanks to our user-friendly dashboard. On top of that, our expert team and easy-to-follow documentation are here for you, every step of the way.
Starting from $75 / 68€ / £60 per month.
To see if Pricing Manager is a fit for your property, try a free trial today: https://app.mylighthouse.com/pricing-manager/free-trial/intro
2. Guesty Dynamic Pricing System
Guesty offers a suite of automation tools for property management, including automated messaging, task automation, and dynamic pricing.
Guesty is best suited for Vacation Rentals, Serviced Apartments, Urban Rentals, Guesthouses and B&Bs as well as Aparthotels and Outdoor stays
Key features that set Guesty apart from others on the market include:
Build price strategies and plans with high levels of customization and granularity.
Apply pricing strategy across all distribution channels with one click, saving time on manual implementation.
Users can offer flexible rate plans, coupons, and promotions to draw in new customers.
3. Product: Little Hotelier Dynamic Pricing System
Little Hotelier's Reporting Insights product offers detailed analytics and reporting for small hotels and B&Bs. This cloud-based solution provides real-time data on occupancy rates, revenue, and other key performance indicators, enabling hoteliers to make informed business decisions.
Little Hotelier is best suited for small hotels, B&Bs, and vacation rentals.
Key features that set Little Hotelier apart from others on the market include:
Customizable dashboards: Reporting Insights provides customizable dashboards that allow users to easily view and analyze key performance metrics.
Detailed revenue reports that provide insights into revenue by room type, booking channel, and more.
Guest demographic reporting allows hoteliers to understand their customer base and tailor their marketing efforts accordingly.
4. Product: Pricepoint Dynamic Pricing System
Pricepoint is a real-time price optimization engine pioneered by industry experts and data scientists with two decades of experience building AI-powered revenue management systems. Pricepoint analyzes the market and updates room prices to keep hotels ahead of the curve.
Pricepoint is best suited for small to mid-sized hotels and hostels, that want to automate their pricing strategies utilizing AI tools.
Key features that set Pricepoint apart from others on the market include:
Real-time market data: PricePoint's pricing engine uses real-time market data to generate prices that are optimized for each individual property.
Customizable pricing rules: PricePoint's platform allows users to set customizable pricing rules based on factors such as booking lead time, occupancy rates, and more.
Multi-channel integration: PricePoint integrates with a variety of booking channels, including Airbnb, Booking.com, and Expedia, allowing users to manage their pricing strategies across multiple platforms from a single dashboard.
5. Product: PrenoHQ Dynamic Pricing System
Preno HQ's dynamic pricing offering uses real-time data to optimize pricing for hotels, helping them to increase revenue and occupancy rates. The platform offers customizable pricing rules, automated pricing updates, and performance analytics to enable hoteliers to make informed pricing decisions.
Preno HQ's dynamic pricing solution is best suited for small to medium-sized hotels, motels, and bed and breakfasts. The platform is designed to be user-friendly and easy to use, making it a good fit for hoteliers who may not have extensive pricing experience.
Key features that set PrenoHQ apart from others on the market include:
PrenoHQ's dynamic pricing solution is designed to be user-friendly and intuitive, making it easy for hoteliers to set up and manage their pricing strategies.
PrenoHQ's solution uses real-time data to optimize pricing, ensuring that hoteliers are always up-to-date with the latest market trends and able to adjust their prices accordingly.
PrenoHQ's dynamic pricing offering allows hoteliers to create custom pricing rules based on their specific needs and preferences, giving them greater control over their pricing strategies.
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6. Product: Amenitiz PriceAdvisor Dynamic Pricing System
Amenitiz's dynamic pricing tool uses AI-powered algorithms to optimize pricing for hotels, helping them to increase their revenue and occupancy. The platform offers real-time pricing updates, customizable pricing rules, and performance analytics to enable hoteliers to make informed pricing decisions.
Amenitiz's dynamic pricing tool is best suited for small to medium-sized hotels, bed and breakfasts, and vacation rentals.
Key features that set Amenitiz PriceAdvisor apart from others on the market include:
Amenitiz's dynamic pricing tool uses AI-powered algorithms to optimize pricing, ensuring that hoteliers are always up-to-date with the latest market trends and able to adjust their prices accordingly.
Amenitiz's solution allows hoteliers to create custom pricing rules based on their specific needs and preferences, giving them greater control over their pricing strategies.
Amenitiz's dynamic pricing tool integrates with multiple booking channels, enabling hoteliers to manage their pricing strategies across multiple platforms from a single dashboard.
7. Product: Price Labs Dynamic Pricing System
PriceLabs' dynamic pricing tool is an automated revenue management tool that uses data analysis and machine learning algorithms to adjust rates in real time based on demand, seasonality, and other factors, helping hosts and hoteliers increase their revenue and occupancy rates.
PriceLabs' dynamic pricing tool is best suited for vacation rental hosts and small hotels, including bed and breakfasts, inns, and boutique hotels.
Key features that set Price Labs apart from others on the market include:
Users can set up custom pricing rules based on their specific business needs, such as minimum and maximum stay requirements, discounts for longer stays, and more.
The tool monitors competitor rates in real-time and adjusts prices accordingly, ensuring that users remain competitive in their market.
PriceLabs uses data analysis and machine learning algorithms to provide users with actionable insights and recommendations on pricing strategies, helping them increase their revenue and occupancy rates.
8. Product: Aoisell Dynamic Pricing System
AIOSELL's revenue management software is a cloud-based platform offering dynamic pricing features to help hotels, resorts, and vacation rentals optimize pricing strategies. The tool integrates with multiple channels, including OTAs and the hotel's website, and uses AI and machine learning algorithms to analyze market demand and competitor rates.
AIOSELL's revenue management software is best suited for mid-sized to large hotels, resorts, and vacation rentals.
Key features that set Aoisell apart from others on the market include:
AIOSELL's revenue management software uses AI and machine learning algorithms to analyze market demand and competitor rates in real-time, allowing hoteliers to adjust their rates instantly and maximize revenue potential.
The platform integrates with multiple channels, including OTAs and the hotel's website, to streamline pricing and inventory management across all channels from a single dashboard.
AIOSELL's software offers customizable pricing rules based on the hotel's needs and preferences, allowing hoteliers to set different prices for different room types, seasons, and events. This feature enables hoteliers to optimize their pricing strategies and maximize revenue.
Summary
When choosing a dynamic pricing solution be sure to choose an industry leader that can provide actionable insights that go beyond just dynamic pricing. Pricing Manager utilizes data from across the entire Lighthouse commercial platform, the industry's most comprehensive dataset, offering an unrivaled depth and breadth of data.
Pricing Manager’s highly flexible autopilot rule enables automated pricing recommendations to be implemetned effortlessy, and the platform also offers leading usability and is highly accessible to all users regardless of skill level.
If you are in the market for a dynamic pricing solution for your hotel, try a free trial of Lighthouse’s Pricing Manager today.