You must have heard about Trivago’s slogan – “The same hotel, the same room, but two different prices, WHY PAY MORE?” Odd isn’t it, Let’s find it out. The technique that they use is called the art of dynamic pricing.
What is dynamic pricing?
Dynamic pricing, also called real-time pricing is where businesses are able to change the price based on supply and demand, competitive pricing and is also determined by a customers’ ability to pay etc.
How do OTAs determine their prices?
Prisync and other similar software are one of the dynamic pricing tools that they use. According to Prisync, it is a price planning and merchandise management tool for e-commerce businesses. This software helps track competitor prices and stock levels. By using AI technology, all the OTAs collect competitor and supplier data in order to offer the best price for their consumers.
How to get better deals among OTAs?
Change the country: In fact, there are other features that I found in hotels.com that may shock you! The price of your hotel will change if you change the country that you are currently in! See this unbelievable evidence below:
Just by changing the country from Australia to Canada, I received a discount of $25 AUD.
Visit a couple OTAs: If you visit only one OTA, you may not get the best price. However, visiting a couple OTAs may give you a better deal. If you visit Booking.com at first and then visit hotels.com, the second OTA that you visit will always have the same price but may even have better deals than the first one. You can save money from this because they can use dynamic pricing software to track your cookies and the price of competitors.
Final thought: How do OTAs target price-sensitive consumers on an e-commerce platform?
The best way is to build an online loyalty programme. Companies such as Agoda have established a loyalty programme called PointsMAX to appeal to price-sensitive customers, which allows consumers to gain points when they make a booking. Consumers can then redeem a free plane ticket when they reach a certain number of points. This kind of loyalty programme can attract consumers to stick with your brand, even though your price may be slightly higher than your competitor. Furthermore, companies could offer bundle pricing deals through email. This can increase revenue and the average purchase amount, but also reward your consumers.
What are some of the tricks that you use when you book accommodation? Leave a comment below 🙂