In the world of hotel room distribution and accommodation, the terms dynamic rate and static rate are probably familiar. But do you really know which is more suitable for your B2B (business-to-business) strategy?
Many hospitality businesses are still unsure about choosing between these two systems. Making the wrong decision can have a significant impact on revenue, partner relationships, and even brand reputation in the market. So, which is actually more profitable? Let's take a closer look.
What Is a Static Rate?
A static rate is a fixed room rate set for a specific period, usually one year. This rate is commonly used for contracts with partners such as offline travel agents, wholesalers, or tour operators. Because it is fixed, a static rate offers price certainty for partners and makes it easier to create tour packages.
Advantages of a static rate:
Stable and easy to manage
Suitable for markets that are not yet fully digital
Simplifies budget planning and B2B promotions
However, static rates also have their downsides. Amid fluctuating demand, fixed rates can be a trap. During high season, hotels can lose potential revenue. Conversely, during low season, these rates can be too high and uncompetitive.
What is a Dynamic Rate?
A dynamic rate is a flexible rate system that can change based on market demand, room availability, and revenue management strategies. It is typically used by OTA (Online Travel Agent) platforms, channel managers, or digitally-based B2B partners.
Advantages of dynamic rates:
More responsive to market changes
Maximize revenue during high demand
Avoid overpricing during low seasons
The downside? Dynamic rates require a robust digital system, consistent controls, and an understanding of revenue management. Without them, you could be overwhelmed.
Which is More Profitable for Your Hotel?
The answer depends on your target market, digital capabilities, and distribution strategy. If you're still partnering with many offline agents and need stable rates, a static rate may be a short-term solution. But if you want to play aggressively in the online market and pursue maximum revenue, a dynamic rate is clearly superior.
The good news is, you can combine the two. With a blended strategy, you can maintain traditional B2B partnerships while implementing dynamic rates on digital channels. The key lies in proper system management and e-commerce strategy.
Optimize Your Rate Strategy with ecommerceloka
Managing dynamic and static rates simultaneously is no easy task, especially if you also have to manage distribution channels, OTAs, content, and digital marketing. This is where ecommerceloka comes in.
We understand the challenges of the hospitality industry in the digital age. With the support of a professional team and integrated tools, we help you create a rate strategy that is flexible, adaptive, and still profitable.
Dynamic and static rates aren't about which is right or wrong. They're about how you adapt them to your business needs and market changes. Don't miss opportunities just because your system isn't ready.
Consult ecommerceloka about your rate and distribution strategy today. We'll help your business grow, from backend to booking.