Dynamic Pricing

Definition

Dynamic pricing is the practice of changing room rates in response to demand signals — pace, compset moves, OTB position, events, day of week. As distinct from static pricing (one BAR for the whole year).

What it tells you

Dynamic pricing assumes demand is non-uniform — some nights are worth €200, others €80. Same physical room, very different willingness-to-pay. Static pricing leaves money on high-demand nights and discourages bookings on low-demand ones.

How to track it

Manual dynamic pricing means the revenue manager updates rates by hand. Automated dynamic pricing (RMS / Smart Pricing) computes rate recommendations from a model.

Where it fits

The default pricing approach for hotels with meaningful demand variability — which is most properties beyond the cheapest tier.