The region’s largest hotel operator, Accor Asia Pacific, is moving to a Dynamic Pricing model and reducing fixed rate allotments in the current round of 06/07 contract negotiations.
Bullish regional hotel markets – in particular Hong Kong, Sydney, Bangkok and Melbourne – are also colouring agreements and mean that room rates are set to increase by 10% in popular destinations with limited supply.
General Manager Pricing and Distribution, Maria Cary, said traditional static pricing is fast becoming an historic relic.
“This is a real issue for wholesalers, inbound operators and suppliers,” she said.
“It just doesn’t make sense to sell at a flat price across the year.”
Ms Cary said static rates are irrelevant four days out of five when they are either below or above the dynamic market rate, which consumers can see via any number of Internet sites.
“In benchmark cities like Sydney and Singapore the rates are going to be above the market 40% of the time and below it for another 40%,” she said.
“So what we are doing for next year’s contracting is giving static rates to those that require them but over and above the allotment it shifts to Dynamic Pricing.”
She cited an Accor study which showed that one major player had lost A$50,000 in potential commissions in a single year by sticking with the static model.
However, Ms Cary said despite continued resistance there had been significant change in attitudes over the past 12 months.
“A year ago we were talking with people about Dynamic Pricing and no-one wanted to know about it, now we’re getting a mixed reaction,” she said.
“A third of the wholesalers we’re talking to don’t want to hear about it. They are either resistant to change or don’t understand the benefits of Dynamic Pricing.
“Another third want to make it happen and have the technology to do so.
“Then there is the remaining third that can see they need to do it but their technology is holding them back.”
Ms Cary said a couple of major Singaporean businesses – Chan Brothers and HIS – are now connecting directly to the Accor system, and predicted others will follow.
She said technology is crucial and that wholesalers who are serious about adapting must invest to ensure they are not left behind.
Accor offers Dynamic Pricing to wholesalers either direct or through the GDS, Pegasus, WorldRes and the Internet.