We live in times of change. Technological advances now allow hoteliers to use more flexible techniques when it comes to setting the prices for their accommodation.
This is the case of open pricing, which has been proposed as an alternative to the more dynamic pricing policies used within the competitive discipline of Revenue Management.
The main advantage of open pricing is that hoteliers can sell the rooms at different rates on different channels. This means that a hotel can maximize benefits without having to close sales on any channels.
Also, when this strategy is applied, a cost per stay can be fixed according to each channel’s features, as well as the different market segments and the level of demand.
On the other hand, dynamic pricing is more conditioned by the variations of the Best Available Rate (BAR). When applying open pricing, different types of BARs are generated, according to the features of each type of client that books a room; this automatically increases the chances of the hotel selling more rooms.
That is to say, having more than one BAR, the hotel can segment their offers further and attract a larger number of guests. It means the prices are more flexible and therefore the market niches where the hotel can be influential widen. Open pricing literally opens the door to clients who would initially never consider the hotel because the sole BAR was too high and above their budget, or because they consider it too cheap.
In an industry with so many changes and so much technology as the tourist industry, it is a technique that can be implemented with relative ease. It can also be supplementary to dynamic pricing, which is more consolidated in this sector. Revenue Management’s main goal is to maximize the hotel’s benefits, putting into practice all its professional know how.
Hence open pricing is presented as yet another resource to achieve that goal. As technology advances, everything points to open pricing helping hoteliers perfect their start up.