How does Revenue Management set pricing for different units?
It is important to begin by saying that effective pricing is market based, not cost based. The consumer has a threshold for how high they will go, based on the value of a given complex, and the demand for a particular period. It’s our job to make sure we are not selling your product for less than the consumer is willing to pay. This is referred to as ‘Revenue Dilution’. When setting rates, we take a number of factors into consideration, including historical performance, weather patterns, competition and the economy. We look at each day of the year and set rates as high as the value of the complex and demand for the period will allow. If demand for a particular period is low, it may be necessary to discount in order to stimulate bookings. Discounting is especially important during the summer months, non-holiday winter season, and many midweek periods. Please take into consideration that this is all variable depending on complex and unit type. Some unit types have high demand all week lo
