While pricing is recognized as one of the key success factors, it is one of the most difficult things to get correct. Pricing is a very emotional process, it’s like marketing – everyone is an expert. In a Hotel, this means that from the Owners to the General Manager, the Finance Director, the Sales Department to the Reservation agent all have an opinion on how a Hotel should be priced. Reality is, you can never really get it right – and you can never get everyone to agree on what the right price should be. The best approach is to take the emotions out of the equation and to have a structured, measured and scientific – left brain - approach to pricing – which is often counter-intuitive with the service – right brain - culture in a typical Hotel. The most forward looking hotel companies realize that a) Pricing is very hard b) It has to be done on an ongoing basis c) it has to be part of the culture. Gone are the days when you established your pricing structure once during budget season and then let it run its course. Competitive pressures are higher and technology is giving guests more pricing power than ever. So these companies have really worked over the last few years on putting their pricing in order. They have either invested in technology to be able to dynamically price, or they have increasingly reached out to specialist pricing companies to provide the analytical support they need to price optimally. This could be in the form of augmenting their own pricing technology or through analytical services which provide scientifically derived pricing recommendations. With a structured and proven approach and letting the data speak removes some of the emotional fuzziness and provides everyone with a better framework to work from. The unbundling of the pricing has contributed hugely to return most of the Airlines to profitability – but at what cost to the customer experience? From a “left brain” - pricing and revenue management - perspective, it is definitely something which could be considered, however the conditions in the Hotel industry are very different. Hotels have a very different business model than Airlines. Margins are in general much higher and we actually see more bundling then less, especially in the segments of the industry where it make most sense to unbundle. It is still a mystery to many why guests are required to pay USD 30 for internet when paying USD 200 for a room, while paying nothing for a USD 50 room. Effectively, unbundling has always been a reality in the upper/luxury segment of the industry, while it is quite the opposite for the lower/limited service segment. Get the full story at HSMAI