***Guest post from RoomPriceGenie, a WebRezPro partner***
There’s a saying: “You know you’re priced right when your customers complain—but still buy.” While not exactly the warmest sentiment, it reflects a real-world truth: pricing is a balancing act between maximizing revenue and maintaining guest trust.
For many hoteliers, especially those who pride themselves on guest loyalty, dynamic pricing feels risky. Will regular guests feel cheated if they book today and see a lower rate tomorrow? Will rate fluctuations hurt their perception of fairness?
At RoomPriceGenie, we often hear these concerns from hoteliers and other accommodation providers.
The good news? Data and guest behavior tell a different story.
Most Guests Expect Prices to Fluctuate
Dynamic pricing automatically adjusts your rates in real time based on demand, season, local events, and market trends. It’s common in everything from airline tickets to ride-share apps, and most travelers now see it as part of life.
This shift in consumer expectation is exactly what The Cabins at Cloudcroft in New Mexico have experienced. Their co-owner, Karl Campbell, shared:
“Most of our guests are used to dynamic pricing from OTAs. Those who aren’t will usually call, and we explain how we price. We’ll always care for them, and it works well for us and our guests.”
They even manually adjust prices for returning guests based on loyalty, military status, or booking history. The bottom line? Most travelers are fine with fluctuating pricing, as long as they understand the reason.
Dynamic Pricing Doesn’t Have to Hurt Guest Experience
To dig deeper into this question, RoomPriceGenie partnered with the ZHAW School of Management and Law on a research study. The results showed that dynamic pricing has no significant impact on guest satisfaction, perceived fairness, or loyalty when used transparently and thoughtfully.
In fact, using real-time pricing helps hotels avoid over- or undercharging, and ensures guests are seeing rates that match market value. Fairness, it turns out, doesn’t mean fixed prices—it means clear value.
As Hendrik Niehues, Business Development Manager at RoomPriceGenie and a hotel owner, explains, “Guests don’t mind paying more if they feel the value is there. The problem starts when price changes feel random or unjustified.”
Price = Expectations
When rates go up, so do guest expectations. That’s why successful revenue management isn’t only about adjusting prices. It’s also about ensuring your product and service meet or exceed those expectations.
At The Cabins at Cloudcroft, this means keeping rates flexible, but guest service consistent. For others, it might mean adding a personal touch or small perk when rates spike.
And let’s be clear: the danger of scaring away your regular guests (or any guest for that matter) lies in neglecting the guest experience.
Strategies to Use Dynamic Pricing Without Scaring Guests Away
- Be transparent about rates: Display rate ranges, for example, “starting from $89,” especially on your website and booking engine. If your returning guest asks why prices fluctuate, explain it’s due to demand, seasonality, or special events.
- Pair pricing with perks: When raising rates during high-demand periods, consider adding small perks like early check-in, complimentary drinks, or enhanced amenities. These cost little but add perceived value.
- Use guest data to reward loyalty: Pull reports from your PMS to identify repeat guests and offer them exclusive rates or first access to peak-season availability.
- Leverage your PMS and RMS integration: Connect your property management system with your revenue management solution. RMS help you adjust rates automatically, while allowing manual tweaks for loyal guests or special occasions.
- Stay tuned into reviews: Your pricing and guest sentiment should be in sync. Keep an eye on guest feedback.
Loyalty and Dynamic Pricing Go Hand in Hand
Guests appreciate transparency, fair value, and consistent service quality. As long as you keep these at the heart of your pricing strategy, you can both increase revenue and maintain (even grow) your returning guest base.
Dynamic pricing is part of the modern hospitality toolkit that, when used wisely, ensures your property remains competitive, profitable, and loved by guests.
About RoomPriceGenie
RoomPriceGenie is an innovative, award-winning revenue management system (RMS), originally created for small, independent hotels and now used by more than 3000 hotels and groups of all types and sizes in 65 countries worldwide. RoomPriceGenie is the easiest way to ensure your rooms are priced right, every night. It’s fast to implement, intuitive to use, and simple to understand. In an uncertain world, it’s revenue you can count on. Find out more about RoomPriceGenie at www.roompricegenie.com.
