Dynamic pricing is a pricing strategy that adjusts room rates in real time based on market conditions. This allows hotels to fluctuate rates based on various factors to maximise revenue.
What is Pricing Logic?
The pricing logic feature on the booking card provides insights into the factors influencing room rates at the time of the booking. Specifically, it displays:
- The hotel’s occupancy level at the time of the booking.
- The competitor pricing data that was factored into the Revenue Management System (RMS) when determining the optimal rate.
Since the RMS automatically adjusts prices based on these factors and pushes them across all channels, Pricing Logic serves as a valuable tool for understanding why a booking was made at a specific rate.
Key data points in Pricing Logic
1. Raw Occupancy
Raw Occupancy is calculated as:
(Sold Rooms / Total Hotel Inventory)
The Raw Occupancy shown on the booking card reflects the hotel’s occupancy level on the guest’s arrival date at the time of the booking.
Example:
If a guest had booked a stay from Mar 7 to Mar 9, the occupancy displayed will be for Mar 7 (the arrival date) at the time of the booking.
2. Competitor Price
The Competitor Price represents the average competitor rate used by the RMS when determining the recommended selling price at the time of the booking. It is calculated based on the Total Rate for the length of stay.
Example:
For a booking from 7 to 9 Mar, the Competitor Price shown is the sum of the average competitor price on the nights of 7 and 8 Mar.
Note: Competitor Price is not available for all hotels. Its availability depends on the pricing model established by the Revenue Team in consultation with the hotel.
Can't find your answer? Contact the ZUZU Helpline
Tags: Price logic, dynamic pricing strategy, hotel's current occupancy level, hotel's competitor, understanding the pricing logic, pricing tool, factors affecting room selling prices, revenue optimisation, booking card