For many in the hospitality business, effectively managing group business is a linchpin strategy. And companies looking to give their employees a fairly priced room on the road, structure deals with hotel companies for a single discounted rate applicable in all markets (with few exceptions) in return for a guaranteed number of nights.

This system worked great for years. But then technology and internet came along and upended the entire process. Now, the hospitality industry (both hotels and airlines) is changing the way rates are negotiated. It’s not yet known if margins will be positively affected in the long term, but it’s irrelevant anyway since this change is inexorable.

The change is a shift from static to dynamic pricing. Where static pricing generally sets a single rate across all markets, dynamic pricing is a more flexible model where pricing fluctuates based on individual market demand at a particular time as well as each market’s typical rates.

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