{"id":22735,"date":"2020-04-14T09:19:35","date_gmt":"2020-04-14T09:19:35","guid":{"rendered":"https:\/\/www.xotels.com\/uncategorized\/variable-pricing\/"},"modified":"2024-12-23T13:19:37","modified_gmt":"2024-12-23T13:19:37","slug":"variable-pricing","status":"publish","type":"post","link":"https:\/\/www.xotels.com\/en\/glossary\/variable-pricing","title":{"rendered":"Variable Pricing"},"content":{"rendered":"

What is the meaning \/ definition of Variable Pricing in the hospitality industry<\/a>?<\/p>\n

The term Variable Pricing refers to cases in which a business offers a variety of price points throughout different locations, point-of-sale at different times. Variable pricing focusses on finding the optimal balance in between the volume of sales and the income of per unit sold \u2013 based on a number of factors. Hotels routinely vary prices in response to forecasted demand. When demand is high, or when future sales are brisk, prices are high. During off-peak seasons, demand is low \u2013 prices therefore too.<\/p>\n

The reason behind variable pricing, lies in customers perception of value. The perception of value, is influenced by many external factors. Within hotel industry<\/a>, days such as Christmas and national holidays are generally of higher demand<\/a>, which is reflected in the price. As value is perceived at different levels, prices vary accordingly. Variable pricing can also create the perception that a hotel room<\/a> is of more value and actually leads to enhancing the customers\u2019 perceptions of its worth. This results in some consumers paying very high prices while others are may get a deal.<\/p>\n

Advantages:<\/strong><\/p>\n

\u2013 Sellers may be able to sell goods which were not in demand at a lower price thus, realising some profits.<\/p>\n

Disadvantages:<\/strong><\/p>\n

\u2013 Variable pricing may lead to losing out on customers who would have paid a higher price for the same product but are now offered the service at a lower price.<\/p>\n

See also:<\/strong><\/p>\n