Marriott is set to introduce dynamic pricing to its Bonvoy reward travel program. Effective in September, travelers will need to spend 14 – 33 percent more reward points in exchange for an award night when a hotel is busy. Meanwhile, travelers may also receive a discount on an award night when a hotel has low occupancy. Dynamic pricing Dynamic pricing is a common tactic in revenue management (also known as yield management ), allowing service firms to respond to consumers’ fluctuating demand for the perishable inventory with a fixed capacity. In other words, a service provider will increase the price when the demand goes up and lower the price when the demand goes down. Dynamic pricing turns out to be a very effective way to maximize a service firm’s revenue performance. It is hence not surprising to see more travel companies are now introducing dynamic pricing to their reward programs. For most consumers, however, dynamic pricing often means th...
Hospitality/Tourism Management | Service Marketing | Information Technology