Dynamic Pricing: How to optimise your occupancy and revenue with smart pricing strategies

In the current hospitality sector, sticking to static pricing is a missed opportunity. Dynamic Pricing is a strategy where you automatically adjust your accommodation prices based on real-time market demand, competition, and occupancy. Instead of using the same rates all year round, this method allows you to respond immediately to market fluctuations. This not only helps to maximise your occupancy rate, but also allows you to optimise your revenue during periods of high demand.

As an accommodation owner or manager, it is essential to understand that guest expectations are changing faster than ever. According to recent trends in hospitality, the use of data and automation has become crucial to remain competitive and personalise the guest experience. Furthermore, the government has expanded the '500-rule approach' to reduce administrative burdens for entrepreneurs, which offers an excellent opportunity to streamline complex internal processes with smart automation.

This article was written by Peter, Sales Director and owner of FLOR-IT / EDICE - PMS. With our years of experience in building all-in-one management systems, I help accommodation managers gain control over their operations and take the step towards data-driven management.

What Dynamic Pricing means in practice

In practice, Dynamic Pricing means that your rates are no longer set in stone. Imagine you manage a small-scale resort. In the past, you might have used a fixed rate for the high season and a lower rate for the low season. With Dynamic Pricing, you look further. If a large event takes place in your region or if the weather forecast for a specific weekend is excellent, demand rises. A smart system recognises this trend and automatically increases your prices. Conversely, if you see that your occupancy is lagging for a certain period, you can lower prices to attract guests after all.

The goal is to find the balance between occupancy rate and rate that generates the most revenue. As described in the ultimate guide to managing vacation rental revenue, it is not always advantageous to aim for 100% occupancy if this comes at the expense of your margins or maintenance opportunities.

Why it matters for your bookings and revenue

The dependence on OTA (Online Travel Agency) platforms is a major cost factor for many entrepreneurs. By managing prices manually, you are often left playing catch-up. However, when you implement Dynamic Pricing, you can make your own website more attractive. By offering competitive rates on your own platform, you can increase direct bookings and thus save significantly on commission costs. As explained by Booking.com for Partners, understanding your commission structure is the first step towards a healthier margin.

In addition, PMS (Property Management System) integration helps to keep your prices consistent across all channels. If your prices on your own website move dynamically with the market, you reduce the need to pay a high commission to external parties for every booking.

How EDICE - PMS helps with this

EDICE - PMS is designed to simplify the management of your accommodation. As an all-in-one system for hotels, campsites, B&Bs, resorts, tiny houses, and hostels, it offers the tools you need to centralise your pricing strategy. With our channel manager, which features 60+ connections (including Booking.com, Airbnb, and Vrbo), you synchronise not only your availability but also your prices in real-time.

Our PMS dashboard gives you direct insight into your revenue, occupancy, and statistics. This allows you to make informed decisions about your pricing strategy. The built-in booking widget for your own website is fully responsive and allows guests to book directly, which is essential for increasing your direct revenue. Because EDICE - PMS also manages your guest module and invoicing, you save time on administrative tasks, which fits perfectly with the government's 500-rule approach to reduce regulatory burden.

Common mistakes

A common mistake is the 'set and forget' approach. Dynamic Pricing requires that you regularly evaluate your strategy. Another pitfall is ignoring your own website. Many managers focus entirely on the prices in the extranet of large platforms, as explained in the manual on setting or changing room rates, but forget that their own website should be the most important sales channel. Also, not synchronising prices in time leads to price differences between channels, which confuses guests and harms your reliability.

Does this also work in your region?

Whether you manage an accommodation in the Netherlands, on the Zeeland coast, in the hilly Limburg, or in beautiful France, Dynamic Pricing is universally applicable. Market dynamics differ by location, but the principle of supply and demand remains the same everywhere. EDICE - PMS supports accommodations in various regions with multilingual support (Dutch, English, German, French).

Frequently asked questions

Is Dynamic Pricing only for large hotels?

No, it is also essential for B&Bs, campsites, and vacation rentals. It helps you stay competitive without spending hours on it every day.

How do I prevent my prices from becoming too low?

With a good PMS, you can always set minimum rates so that you never sell below your cost price.

Do I have to adjust my prices on each platform separately?

No, with a channel manager like the one in EDICE - PMS, your prices are automatically synchronised to all connected channels.

Sources

• 500-rule approach expanded, now for all rules | Rijksoverheid.nl
• Understanding our commission | Booking.com for Partners
• Setting or changing room rates | Booking.com for Partners

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