Before we dive into the real-life examples, let’s start by defining Open Pricing. Before basic revenue management principles caught on in the hotel industry, many hotels set flat rates for weeks or months at a time, with perhaps some slight variation up or down on weekends or during peak seasonal periods. Then came dynamic pricing, with the goal of selling the right rate at the right time, capturing the maximum rate guests were willing to pay, which often meant selling different rates to different guests booking the same stay dates.

Open Pricing takes revenue management a step further: selling the right product at the right rate to the right customer at the right time through the right channel. Open Pricing resists the urge to set restrictions or closeouts; instead, this strategy tests guests’ price sensitivity by offering all the options, albeit at rates that reflect market demand and competitor pricing. Duetto pulls in third-party pricing data, as well as local event data, ensuring pricing is updated in as close to real-time as possible.

“Open Pricing allows you to keep all distribution channels open, without sacrificing rate or length of stay by setting pricing rules by rate code, room type, and segment,” Darryl Elliott, Director, Revenue Management at Crystalbrook Collection.

At full-service hotels, revenue management isn’t limited to rooms revenue; revenue managers must also consider the contribution of non-rooms revenue, which can increase your bottom line. Italian hotel chain Gruppo UNA did away with spreadsheets and manual rate setting, upgrading to Duetto’s BlockBuster tool and Open Pricing strategy to maximize profitability across their 52 hotels. Gruppo UNA’s Director of Revenue, Luca Vallasciani, says “In some properties, non-room revenue reaches almost 40% of the total revenue. If we are just looking at room revenue, we are missing a big part of the cake. We love that BlockBuster lets us compare displacement using the total revenue and not just rooms. This will help us a lot in driving total profitability.”

Another full-service hotel company, Palladium Hotel Group, runs Duetto’s Open Pricing strategy across its diverse portfolio, which includes resorts, city-center hotels, and all-inclusives. With this system in place, the group’s revenue team can identify which segments and room types perform the best and work to optimize them by running targeted marketing offers or opening more inventory.

“Open Pricing has significantly enhanced our ability to get creative with our revenue strategy and the packages we offer. With the flexibility to set different prices for various segments, room types, and channels, we can design tailored packages that cater to specific customer needs and preferences,” says Diego Fernandez Perez De Ponga, Palladium’s Global Senior Director of Revenue & Distribution.

Open Pricing doesn’t only work for full-service hotels; boutiques and independents can also realize the benefits of using Open Pricing, as Adriatic Luxury Hotels, which operates six independent luxury hotels in Europe, found. In smaller properties, smart revenue management is even more critical, because the profitability of every room matters. “Open Pricing has helped us to maximize our last room availability which has increased ADR,” notes David Taylor, the CEO of Adriatic Luxury Hotels. In addition, the automation and analytical features that Duetto provides has enabled the group’s revenue team to work more efficiently.

Across the world, The Remington Orange, an 82-room hotel in New South Wales, Australia, also found success applying Open Pricing. Before using Duetto, the property would manually change rates in reaction to supply and demand, and they would manually pull reports to show performance compared to last year or last week. Now, The Remington Orange leverages automation to set dynamic discounts and rate differentials, and the property has seen a 10% uplift in ADR. But one of the most interesting results of Open Pricing is how tightly the hotel can control its pricing and visibility on OTAs. Alex Tran, the property’s Hotel Manager, explains, “I am now able to fully control the rate shown on OTAs based on my occupancy. This leads to either a scenario where guests would book on OTA at an inflated price or they would go direct at a lower price. Win/Win.”

Resorts are a great candidate for Open Pricing due to their variety of segments, rate plans, room types, and packaging options. Outrigger Hospitality Group has used Open Pricing at their 14 resorts since 2017 and has unlocked optimal rates across their slew of special rate tiers, like member rates, resident rates, senior rates, and more. And with so many properties to manage, the Outrigger team leverages automation to avoid human error.

Another resort group, Australia’s Crystalbrook Collection, reports that Open Pricing has helped them sell higher room categories more effectively. The ability to automatically decrease rate differentials during slow periods has helped the group book more suites, which has led to higher revenue.

Faced with tight budgets and staff shortages, limited-service hotels are prime candidates for Open Pricing, especially when much of the rate-setting and rate-adjusting can be handled by automation. The collection of six properties in the Lub d Group includes standard hotels rooms and hostel rooms, which are priced per bed. Before using Duetto, the team was setting pricing manually. Now, Lub d leverages different pricing rules per room type and segment, including different rates for online and offline bookings. In the first quarter of 2023, compared to Q1 2022, the group saw ADR increase well over 20%.

Although casinos are known to be at the forefront of revenue management, loyalty, and personalization strategies, casino groups like Choctaw Casinos & Resorts see impressive results from Open Pricing. Their properties typically draw local and regional demand, and they traditionally used direct mail to promote loyalty offers, but those offers were nearly impossible to control and restrict as the arrival date approached. Over time, Choctaw switched to Duetto and the Open Pricing methodology, which enabled them to make pricing decisions faster and more precisely. Rather than giving everyone in their loyalty program a free night, they can now adjust the available offers by segment and by date.

“The nice thing about it is that the guest has choices. They get discounts based on their true value. And sometimes that discount might be higher on a weekend because guests typically play more when it’s busier in the casino. So, if they come on the weekend and they are a lower value player they still get a discount that is comparable to where their value is,” explains Edmund Wong, Choctaw’s Corporate Director of Revenue Management.

How can Open Pricing drive profitability at your hotel? With intelligent revenue management systems like Duetto, your property can leverage cutting-edge tech like automation, AI, and real-time pricing decisions to unlock greater profitability.

This article was created collaboratively by Duetto and HotelTechReport.com