Jun 9, 2023
4 mins read
For many years, dynamic pricing has been effectively used by the hotel industry to help boost sales. Put simply, dynamic pricing strategy involves updating hotel room rates often (or even within the day), based on conditions of the real-time market. If you take supply and demand into account, the prices of hotel rooms should actually fluctuate to help reach the highest possible revenue.
Here’s an example of how it works:
Hotels may have lower rates for a given day because their occupancy is low, as is demand. But, as the day approaches, supply may become reduced, with demand growing higher. There are many factors that can drive this, but the important point is that they need to be able to change their approach to pricing depending on the circumstances of their property.
The ability to nimbly adjust the pricing of rooms allows for the maximum capacity being filled, and therefore, maximum profits. At the end of the day, an empty room helps no one. But dynamic pricing strategy doesn’t just help to boost sales and profits. It can also help ensure that pricing reflects demand, thus creating a higher level of demand. And, it also helps you better understand your customers’ behavior so you can better serve their needs going forward.
With over 20 years in the hotel/travel industry, first at hotels and hotel management company and then at Priceline.com, I have had firsthand experience leading pricing and inventory management decisions to maximize revenue and market share. It’s from this experience that I’m bringing to Flexspace.ai to support the introduction of the first dynamic pricing engine built for on-demand bookings.
Similar to the hotel industry, dynamic pricing strategy can effectively move perishable inventory by easily adjusting pricing based on demand and availability with a simple automated process. With Flexspace.ai, our coworking partners create rate plans in the Flexspace partner dashboard that would set the rates and corresponding rules and restrictions for their on-demand offerings. These rate plans can be set based on several factors, like seasonality, day of week, advance purchase, and more. Once these parameters are set, prices will automatically fluctuate around the base price, with the ability for them to be adjusted further as needed.
So, when spaces are in high demand, operators can take advantage of this increase by raising the rates quickly and easily, ensuring that the remaining inventory is sold at maximum profit. Additionally, coworking space operators who are experiencing low occupancy will be able to advertise more competitive rates to anyone who may be interested in booking a space in their area, thus increasing the chances of conversion.
Given the success that I’ve seen when dynamic pricing is implemented by hotels, it makes sense that dynamic pricing would be a smart strategy for coworking space operators as well.
We’ll be launching Flexspace Dynamic Pricing on our platform next month. With support from our experienced team, you can get this exciting new feature up and running on your account, as soon as it’s available.
Be the first to know about Flexspace Dynamic Pricing. Sign up now for a free strategy consultation with our team.