Open Pricing is a strategy that breaks free from traditional, fixed BAR pricing. In a conventional model, every rate is a fixed modifier of a single base rate.
NB: This an article from Duetto
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For example, a 15% discount on a $100 BAR forces a rate of $85, with little room for nuance.
With Open Pricing, you can set rates at any BAR level. You’re free to dynamically adjust prices across segments, channels, and room types. This means you can implement different strategies across rate codes, from static rates for contracts to fully dynamic rates that react to real-time demand.
In essence, Open Pricing gives you the freedom to price strategically rather than reactively. It ensures every room is sold at its most profitable price, minimizing revenue leakage, and adapting seamlessly to changing market conditions.
4 common myths about Open Pricing
Myth 1: Open Pricing means no inventory controls
Open Pricing and inventory optimization work together
A common misconception is that Open Pricing means leaving all rate plans open at all times. In reality, Open Pricing is about strategic flexibility, allowing you to dynamically adjust rates across segments, room types, and channels while still applying smart inventory controls like length of stay (LOS) restrictions and close to stay restrictions.
You should never have to choose between pricing optimization and inventory controls. With Open Pricing, you get the best of both worlds – accurate demand-based pricing while still prioritizing your most valuable guests.
Myth 2: Traditional inventory controls always outperform Open Pricing/h3>
Rigid LOS restrictions can leave revenue on the table
Some claim that setting strict LOS restrictions is the key to profitability, but in a world where guest demand is increasingly dynamic, static restrictions can lead to missed revenue opportunities.
- What happens when a guest is willing to book a one-night stay at a premium rate, but strict restrictions force them to book elsewhere?
- What about guests who would extend their stay if pricing was flexible enough to accommodate them?
Open Pricing enables hotels to capture both short- and long-term demand efficiently, ensuring that every booking contributes to total revenue optimization.
