The OnRes Blog

Maximizing Hotel Profits: The Role of Technology in Pricing Strategy

By: Steve Behrisch , President & CEO

In the highly competitive hospitality industry, effective pricing strategies are crucial for maximizing revenue and maintaining a competitive edge. 

With the advent of advanced technology, hotels now have access to a variety of tools and platforms that can help them implement and optimize their pricing strategies. 

This blog explores how technology can assist hotels in developing and executing a winning pricing strategy, backed by examples and statistics.

The Importance of a Winning Pricing Strategy

A well-crafted pricing strategy is essential for balancing occupancy rates and revenue per available room (RevPAR). 

It involves setting room rates that attract guests while maximizing profitability. An effective pricing strategy considers various factors, including market demand, competition, seasonality, and customer segmentation.

According to a study, hotels that use dynamic pricing strategies can see a revenue increase of up to 20%.

How Technology Enhances Hotel Pricing Strategies

Here is how technology can help implement an effective pricing strategy in hotels. 

1. Revenue Management Systems (RMS)

RMS platforms use algorithms and data analytics to predict market demand and optimize room rates in real-time. They analyze historical data, market trends, and competitive pricing to recommend optimal pricing strategies.

For example, IDeaS Revenue Solutions and Duetto are popular RMS providers that help hotels maximize their revenue through data-driven pricing decisions.

Hotels utilizing RMS reported a 10-15% increase in RevPAR, according to a study by Cornell University.

2. Dynamic Pricing Algorithms

Dynamic pricing involves adjusting room rates based on real-time supply and demand. Advanced algorithms consider various factors such as booking patterns, market conditions, and competitor rates to set optimal prices.

For example, a hotel using dynamic pricing might increase rates during high-demand periods, such as holidays or local events, while offering discounts during low-demand periods to boost occupancy.

A study by McKinsey found that dynamic pricing can increase revenue by up to 10%.

3. Channel Management Software

Channel management software synchronizes room availability and rates across multiple distribution channels, including OTAs (Online Travel Agencies), GDS (Global Distribution Systems), and the hotel’s own website. 

This ensures consistency and prevents overbooking.

For example, platforms like the OnRes channel manager allow hotels to manage their distribution channels efficiently, ensuring that room rates are optimized and inventory is accurately updated in real-time.

Hotels using channel management software experience an average increase of 18% in online bookings, according to Phocuswright.

4. Business Intelligence (BI) Tools

BI tools aggregate and analyze data from various sources, providing insights into market trends, competitor pricing, and customer behavior. This information is critical for making informed pricing decisions.

STR and TravelClick offer BI solutions that provide comprehensive market data and benchmarking reports, helping hotels refine their pricing strategies.

Hotels leveraging BI tools can improve their revenue management practices, resulting in a 15% increase in profitability, according to a Deloitte report.

5. Customer Relationship Management (CRM) Systems

CRM systems help hotels segment their customer base and tailor pricing strategies to different customer groups. 

By understanding guest preferences and booking behaviors, hotels can offer personalized pricing and promotions.

Say, a hotel using Salesforce CRM can identify loyal customers and offer them exclusive discounts or package deals, enhancing customer satisfaction and loyalty.

A study by Hospitality Net found that personalized pricing strategies can lead to a 13% increase in repeat bookings.

6. Artificial Intelligence (AI) and Machine Learning (ML)

AI and ML algorithms analyze vast amounts of data to identify patterns and predict future demand. These technologies can automate pricing decisions, ensuring optimal rates at all times.

For example, Marriott International uses AI-driven pricing models to adjust room rates dynamically, resulting in higher occupancy and revenue.

AI-powered pricing solutions can boost revenue by up to 15%, as reported by a study from the University of Oxford.

Case Studies: Technology-Driven Pricing Success

  • Marriott International

Approach: Marriott implemented an AI-driven pricing strategy that adjusts room rates based on real-time data and predictive analytics.

Outcome: This strategy led to a significant increase in occupancy rates and overall revenue, showcasing the power of technology in pricing optimization.

  • Accor Hotels

Approach: Accor Hotels uses a sophisticated RMS to analyze market trends and competitor pricing, allowing them to make data-driven pricing decisions.

Outcome: The RMS implementation resulted in a 10% increase in RevPAR across their portfolio.

  • Hilton Worldwide

Approach: Hilton leverages BI tools and dynamic pricing algorithms to optimize room rates and improve profitability.

Outcome: Hilton’s use of technology has led to improved pricing strategies, resulting in higher guest satisfaction and increased revenue.


Technology has revolutionized the way hotels approach pricing strategies, offering tools and platforms that provide data-driven insights and real-time optimization. 

By leveraging revenue management systems, dynamic pricing algorithms, channel management software, BI tools, CRM systems, and AI/ML technologies, hotels can implement winning pricing strategies that maximize revenue and enhance guest satisfaction. 

As the hospitality industry continues to evolve, embracing these technological advancements will be key to staying competitive and achieving long-term success.

Steve Behrisch, President & CEO

Steve joined the OnRes Team as an account rep in 2008 and was promoted to VP of Operations a short time later. In 2011, Steve agreed to purchase OnRes and became President and CEO, and has been steering the ship since; achieving significant milestones such as rebuilding the reservation software from the bottom up, forging new partnerships, doubling the revenue, and much more…
Return to the Blog
Back to top