3 Must-Knows of Hotel Dynamic Pricing: What, Why & How to Automate

Trade Secrets | Making a Profit

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What’s better than keeping your room rates optimized? Doing it automatically! Automation is the most efficient way to update your rates on a dynamic basis. 

Here are the fundamentals you need to know about automating your hotel’s revenue management with dynamic pricing.

What is dynamic pricing?

In the past, many hoteliers would set flat rates for their rooms far in advance. They would only vary their rates for obvious, common sense reasons, like charging more for a room at weekends than weekdays, or raising prices during the tourist season. 

Dynamic pricing is a much more flexible approach than the traditional model of setting and forgetting static rates. It involves using time-sensitive information and key metrics to update hotel room rates at short notice, in line with fluctuations in demand. For example, a hotel that uses dynamic pricing has more insight into dates when demand is high and can use that insight to charge a higher rate for those dates. 

When applied effectively, a hotel dynamic pricing strategy means you find it easier to fill your rooms and optimize revenue. What dynamic pricing doesn’t mean is that you can just set all your prices at the last minute. 

We recommend developing a pricing strategy that incorporates forecasting to set your baseline room rates as far in advance as possible. You want to take into account historic seasonal trends, local events, and other factors that you can comfortably predict will affect demand levels. 

Then dynamic pricing can enter the picture, allowing you to adjust your initial prices in the moment with timely data. The pace and agility that effective dynamic pricing for hotels requires means it typically goes hand-in-hand with automation. A strong property management platform like eviivo Suite provides real-time data on factors like your occupancy levels, then allows you to use that data to automatically spur your dynamic pricing strategy into action.

What can you automate as part of your hotel’s dynamic pricing?

Automatic rate increases and decreases

You can use automation to dynamically adjust your room rates in response to changes in your inventory levels. For example, you could automatically increase your rates when you are reaching full occupancy and automatically lower them when you have many rooms available – two routes that can help you drive more revenue from your rooms!

You can make automated rate updates happen in response to rules that you set up on your property management platform. Let’s say you set a rule to increase your rates by 10% for any date when you have just 2 or 3 rooms left. This allows you to earn more revenue from bookings during periods when your accommodation is in demand. And lowering rates helps encourage more bookings during periods of lower demand.

Automatic closeout rules

Dynamic pricing automation can be used for more than rate adjustments. If you use Online Travel Agencies (OTAs) to list your accommodation and take bookings, you may also wish to automatically close your inventory on one, some, or all channels. A good Channel Manager allows you to do this in just a few clicks.

Why should your hotel use dynamic pricing automation?

The importance of implementing your dynamic pricing with total flexibility is right there in the name: it has to be a dynamic process. Using automation helps to ensure your prices adapt fast in line with the latest data. You don’t want your rates being rendered out-of-date by the length of time it takes to monitor and implement those changes manually.

Establishing pre-set rules to automatically adjust rates based on occupancy levels means that, with a one-time action, you can keep your pricing optimized day after day. You’ll save a significant amount of time – in part because you’ll also be able to reduce the number of rate plans you manage! 

Ultimately, instead of chasing extra revenue, you’re bringing it right to your door with automated dynamic pricing.

Automatically closing your inventory on selected booking channels can help you increase your volume of commission-free direct bookings, another key area of effective revenue management. However, it’s important to be confident you can get those direct bookings before you turn off any channels.

How do you know what dynamic pricing rules to automate?

Configuring dynamic pricing rules is great, but the rules need to be informed by accurate, quality data to yield results. There are a few ways to make sure you have access to such data.

A strong PMS like eviivo Suite will provide both real-time and historic insight into your accommodation’s performance, including periods of high and low demand. eviivo Suite also enables you to automate rate adjustments and closeout booking channels according to your pre-set rules.

You can boost the automation capabilities of your PMS by integrating them with specialized dynamic pricing software packages. Platforms such as RoomPriceGenie and PriceLabs automatically set your pricing based on a mixture of market trends and your historic booking performance. 

Finally, don’t underestimate the power of bringing your own knowledge to the table! You can expand your pricing know-how by downloading our comprehensive white paper, ‘How to Build an Effective Pricing Strategy: A Guide to Making the Most Revenue From Your Rooms.


You can’t truly grow with static rates. Dynamic pricing allows you to keep your room rates optimized by taking advantage (and control) of fluctuating demand levels. And by using automation to bring your dynamic pricing strategies to life, you keep the revenue potential of your rooms peaked without losing any precious time. Learn more about Promo Manager, eviivo’s dynamic pricing automation solution.

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