This document discusses implementing dynamic pricing for a hotel in Tunisia called Le Corail Suites Hotel to improve revenue management. It performs a SWOT analysis of the hotel, identifies key demand drivers like day of week and special events, analyzes occupancy rate data to understand relationships with competitors, then builds a dynamic pricing model to automatically set rates based on forecasted demand. The goal is to shift from high volume to high profit booking by ensuring rate parity across channels and offering direct booking incentives.

1. By : Dr. Dino Leonandri, MM, CHA
Room Rate Struture

2. Dynamic Pricing for Hotel Revenue Management

3. Problem Statement
Any Kind Hotel is losing money because they are
unable to forecast accurately the market
demand

4. 1. Find the variables that have direct impact on
the hotel room rates.
2. Forecast the upcoming demand.
3. Build a dynamic pricing model that
determines rates automatically based on the
forecasted demand.

5. Study Case
Le Corail
Suites Hotel
Located in les Jardins du Lac II
Founded on October 2013
A business hotel that has 134
rooms, most of them are suites.
Ranked #3 Best Value of 59
hotels in Tunis (tripadvisor)

6. SWOT Analysis
• Strengths:
– -Strong online reputation / - Centralized information system
(Top Hotel)
• Weaknesses:
– Not a member of chained brand / - No Revenue Management
System (RMS)
• Opportunities:
– Automate the collection of competitors data / - Implement
forecasting
• Threats:
– New entrants (Avani & Novotel) / - Competition from
international brands

7. The concept of Revenue Management originated in the
airlines industry (Zhang, Li, 2018)
It has two principles (Zhang, Li, 2018):
1. The inventory is perishable
2. Different customers are willing to pay different
amounts of money
• Hotel’s focus is shifting from high volume booking to
high profit booking (Caicedo, 2016)
• - Yield Management is part of the Revenue
Management (Zhang, Li, 2018)

9. Demand drivers
Demand = Occupancy Rate (Ivanov, 2014)
Demand drivers (Ivanov, 2014):
• 1. Day of the week
• 2. Special events (i.e. holidays, festivals,
conferences, etc..)
• 3. Competitors’ actions

10. Data Understanding
Occupancy rate cycles for Corail versus its competitors

11. 1. ‘OR Novotel’ and ‘OR Compset’ have a strong positive relationship with ‘OR Corail’.
2. ‘is_weekend’, ‘is_ramadan’ and ‘is_event’ have a significant negative relationship with
‘OR Corail’.

12. Dynamic Pricing

13. Prediction

14. Ensure rate parity across different distribution
channels

15. Offer direct booking incentives
- Encourage customers to make reservations
through our website

16. Thank You
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