Dynamic prices in the leisure hotel industry

Revenue Management has a more than 40-year-old origin. Meanwhile, the concept of dynamic prices has reached whole industries. Revenue Management is a standard application in the aviation industry.

In the hotel industry as well, dynamich prices are no longer new to the customer. In the city hotels, it is normality that prices depend on booking data, demand and channels.

Even large e-commerce companies, such as Amazon, have been using smart prices since a long time. The concept has now also reached abstract industries, such as the retail sector, where retailers increasingly rely on electronic price tags with hourly or daily adjusted prices.

As a result, it is clear that customers are accustomed to dealing with dynamic prices. Dynamic prices are no more niche topics. Dynamic prices are a global, ever growing phenomenon.

Think of many global phenomena that were first labeled as nonsensical and impractical. Thus, e.g. Tesla founder Elon Musk for his ideas of electric cars and self-propelled cars at first strongly smiled. Meanwhile it is, however, as far as industry leaders are afraid of the rising star.

Innovation is new and insecure, but in the end, those who are closed to the new ideas and react too late are mostly left behind. Even the holiday industry can not exclude technological innovations and global phenomena such as dynamic prices in the long term.

We can thus find that revenue management is no longer a 'new' issue in the holiday industry, but a logical and overdue step. It is a must to deal with this and to face future challenges.

The South Tyrolean hotelier and tourism expert Heinrich Dorfer from the Sport- and Wellnessresort Quellenhof brought the topic aptly to the point. It considers the knowledge and use of internal corporate figures to be an important asset for an effective income (revenue) or profit (yield) management strategy. An application of revenue management should therefore be a basic strategy of a hotel long ago, in order not to lose the connection to the competition. You can read here about the exact difference between revenue management and yield management. 

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