HOTELMARKETING.COM

Hyatt on hotel price elasticity, profiling and purchase history

August 27, 2012 | Hotel Marketing

Hotel revenue managers have been working on methods to estimate price elasticity and optimise rates as part of pricing strategies. The objective is to make tactical revenue management decisions easier - not only from the aspect of inventory management, but also in optimising prices.

Overall, there is a slow realisation that knee-jerk reactions in setting prices would not be sustainable in the long-run. Some smarter revenue managers work through marketing and channel mix strategies, to optimise revenue performance.

Price elasticity is an important tool, but should not be used in isolation; an understanding of a hotel’s market is critical to understanding the total impact of price elasticity, says Rhett Hirko, Director of Revenue Analytics, International, Hyatt Hotels & Resorts.

Hyatt recently included price elasticity in its annual workshop to get revenue managers to use this measurement in their overall pricing posture. “As far as ‘specialists’ working on this, I have yet to see price elasticity truly integrated in overall demand optimisation but if someone is able to get this done accurately it could be powerful,” says Hirko, who has worked for Hyatt for over 20 years.

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