Setting up Pricepoint
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      3. Setting up Pricepoint

      Setting up Rooms and Room Types

      Exploring Open Pricing, Tiered Rooms, and Grouped Rooms for optimal revenue management.

      Pricepoint’s AI generates pricing recommendations at the room type level (e.g., Double Room, Triple Room), analyzing each type’s performance, booking trends, and customer behavior independently for the next 365 days. Here are the three key approaches to room pricing in Pricepoint:

      1. Open Pricing (Default)

      • How It Works: Each room type is priced independently, with no relationship to other room types. Pricepoint aims to optimize revenues for each type by dynamically adjusting prices based on real-time demand and performance.
      • Why It’s Effective: Open Pricing eliminates constraints, allowing each room type to achieve its optimal price without compromises. This method is particularly suited for maximizing revenue and efficiency.

      2. Room Tiering

      • How It Works: Open Pricing is applied unless room type prices overlap. If overlap occurs, tiering ensures premium rooms remain priced higher than less expensive types.
      • Example: If a Double Room reaches $100 due to demand and a Premium Suite is also $100, tiering increases the Premium Suite price to maintain a price gap.
      • Risk: Tiering can inflate prices for underperforming rooms, as their prices adjust based on the performance of other room types rather than market conditions.

      3. Room Grouping

      • How It Works: Establishes a fixed price relationship between room types. For example, a Premium Suite price might always be $20 higher than a Double Room price.
      • When to Use: Ideal for nearly identical room types (e.g., Budget, Standard, and Premium Doubles), where buyers choose based on small quality differences.
      • Limitations: For distinct room types, grouping compromises optimization. Only the parent room is optimized, while child rooms follow blindly, reducing individual revenue potential.

      Choosing the Best Approach

      Open Pricing is the default and most effective for maximizing individual room type performance. Room Tiering and Grouping can be useful in specific scenarios but often introduce compromises that limit revenue potential.

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