More succes with dynamic pricing through a strong brand and concept
This article has been written by Geert Buskes (Owner and strategist of digital marketing agency Effecty.nl) and Robin Sleegers (Consultant at RevControl, the Dutch Revenue Management System).
In this article, we will look at the benefits of a strong brand and concept combined with dynamic pricing.
Scarcity
The most important component of dynamic pricing is scarcity. Scarcity is an important marketing principle. Dynamic pricing adjusts the price relative to the supply and demand at that moment. The lower the supply and the higher the demand, the higher the price you can ask for your room or accommodation. With RevControl, dynamic pricing happens fully automatic, so you can always take maximum advantage of these dynamics. A strong brand or concept influences the balance between supply and demand in several ways:
A strong concept often appeals to a more specific target audience
Strong concepts dare to choose. Who is my target audience? And does my concept and marketing appeal to them perfectly? Appealing to a specific target group with a perfectly fitting story automatically ensures that another group of people will not recognize themselves in the concept, which creates scarcity within the right target group.
A strong brand already shows what is unique well before the visit
Many hotels or holiday parks do not take the orientation phase enough into account in their marketing mix. This is the phase in which the guest compares multiple accommodations and looks for the differences to make a well-considered choice.
Nowadays, potential guests use Google and OTA’s to browse for their next destination. Hotels and holiday parks should therefore use those platforms to display themselves to the world. An important factor in this orientation phase is price. Make sure you have the same room rate listed on all the different partner websites, besides your own. With this strategy, the best available rate will be on your own website. This will result in a higher conversion of direct bookings.
A strong concept has more loyal guests and a higher return rate
Guests return more often to a concept or brand that completely matches the needs and wishes of that guest. A strong concept, partly due to choosing a target group and the full adaptation of the concept, responds to this feeling with the result that guests return more often and are more loyal. A returning guest also results in a higher net profit. A returning guest is familiar with your hotel and will therefore book the best available rate, directly! This results in a lower cost per booking. It is therefore very important to be consistent in your pricing parity on the different websites.
Strong concepts often have a higher rating
A strong concept that knows exactly how to appeal to the target group is often rewarded with a higher rating and/or positive review by guests. A higher review score could give you the benefit over a (direct) competitor and therefore strengthen the market position of the hotel. A stronger position in the market allows hotels to set out a different pricing strategy. The relation between review score and room rates is often a very important factor for guests.
Strong brands are more likely to be booked and thus are fully booked faster
Guests are afraid that, if they are late with booking, they will miss out on that beautiful hotel or room that fits their vacation needs so perfectly. Therefore, these hotels are booked earlier and are fully booked faster. With RevControl you can set an occupancy-based price structure, which allows hotels to set the correct rate at any time. RevControl will calculate the forecasted occupancy per arrival date and set the ideal rate accordingly.
This whole effect results in scarcity occurring earlier in the booking season. As a result, you will benefit from higher dynamic prices for a longer period.
Obligation-free brand scan
Effecty
Do you also want to take maximum advantage of dynamic pricing? Then it is possible to have Effecty perform a brand and concept scan without any obligations. This scan will quickly identify opportunities for a stronger concept and brand. We will give you practical tips and tools to start building a stronger brand.
RevControl
RevControl, the Dutch cloud-based Revenue Management Software provides hoteliers a platform to track their performance and automate their pricing strategy.
RevControl is built by hoteliers and software experts who’ve been in the business for over 20 years. The result? A system that is complete, intuitive, and easily integrates with other systems. You can focus on optimizing revenue, and most importantly: creating a fantastic guest experience!
From left to right: Jan Knaepen, Veerle Vrenken, Lieke Bodelier (all from Effecty.nl), Robin Sleegers and Edwin Leenheer (both from RevControl)
