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Dynamic corporate pricing will become more prevalent than static pricing within five years, a senior hotel executive claimed.
Matthew Roberts, head of business sales for Hilton Hotels, said it was always going to be a ”slow burn” persuading corporates to adopt it but his group was now signing up ”a few more each year.”
These ranged from global companies to SMEs.
Mr Roberts was speaking in a debate on dynamic pricing at the UK Hotel Booking Agents” Association (HBAA) Annual Forum at the Park Inn Hotel, London Heathrow.
He defined dynamic pricing as ”how rates vary in response to changing levels of demand.”
He said it was used in both the airline and car rental industries but was newer to hotels.
Mr Roberts said an economic slow down was the best time to use dynamic pricing as it was sensitive to the market.
It was also fair to all parties as hotels did not sell at low rates during periods of high demand and corporates did not pay high rates when demand was low.
It was also simple, with just three to five sets of rates in place of what has been a ”very complex market place.”
Both booking agents and hoteliers attended the session with many backing Mr Roberts” views.
The cited the transparency, consistency in pricing, simplicity and a guarantee of Best Available Rate as reasons for supporting the concept.
But many also opposed it, claiming that a major objection was that it made budgeting harder for corporates.
Other objections including the claim that it let hotels charge what they wanted, that there was no guarantee of savings and that it was difficult for corporate to calculate their average room rate.
In the final vote, the delegates rejected dynamic pricing but by the narrow margin of 53 to 47.