Variable pricing

Variable pricing is a strategy in which a business offers a similar product or service at a variety of price points based on forecasted demand, customer segment, date, time, and location of a sale, and other factors. For example, in hospitality, hotel rates can fluctuate depending on the season (peak, low, or shoulder) or day of the week (weekend prices will be higher due to a surge of leisure travel). This approach allows companies to boost revenue and stimulate off-peak sales.

Variable pricing is close to the concept of dynamic pricing. Both strategies adjust rates to market conditions using a range of criteria, which differentiates them from static pricing. Yet, while variable pricing relies on predefined rules and predictable patterns, real dynamic pricing tweaks rates in response to the immediate situation, often employing machine learning. For instance, it enables hoteliers to quickly fill empty rooms by offering extra discounts on last-minute bookings.