Innovation in Pricing: Attribute Based Selling and Neuro Pricing – Hot Topic Discussed

Madrid, 5 February 2024: As part of the international tourism trade fair FITUR held recently in Madrid, a panel discussion was held at the BEONx and Hotelverse stand, bringing together leaders from the hotel industry to discuss innovation in pricing. Under the title “Innovation in Pricing: Attribute Based Selling and Neuro Pricing”, the roundtable was moderated by David Val from TecnoHotel and counted on the participation of renowned experts: Diego Fernández, Corporate Director Revenue & Distribution of Palladium Hotel Group; Pablo Gago, Global Chief Strategy & Innovation Officer of RoomMate Hotels; Reyes Mañeru, Chief Business Growth Officer of Petit Palace Hotelity.

 

One of the big challenges facing the hotel industry is data management, to which Pablo Gago, from RoomMate Hotels, highlighted that, although significant amounts of data are generated, there is a gap in terms of its quality and usefulness. He stressed the importance not only of obtaining data, but also of having effective tools for its interpretation in the search for profitable customers and the implementation of revenue strategies.

 

For his part, Diego Fernández, from Palladium Hotel Group, added the importance of cultivating a “data culture” in hotel organisations to take advantage of its full potential. He argued that, regardless of technology and procedures, the quality of decisions depends to a large extent on the quality of the data and the importance that the organisation attaches to its management. Reyes Mañeru agreed on the importance of generating a data culture, as well as a revenue and reputation culture, at all levels of the organisation. This is what helps establish the rest of the business strategies. He emphasised the need to integrate and possibly automate data for cost-effective decision-making.

 

In the discussion on attribute selling and personalisation, participants agreed that these strategies are essential for customer satisfaction. The importance of understanding individual customer tastes in order to offer attributes that add real value and generate a positive perception of the hotel experience was underlined.

 

The relevance of customer insight in the management of room attributes was highlighted, highlighting that allowing customers to choose elements contributes significantly to a positive perception of price. RoomMate’s Pablo Gago explained:

 

“You have to know the customer to know what to offer them so that they have a better perception of the price, or even forget about it, if you offer them something that really brings them value on a personal level. Maybe they come to your hotel because it is close to a restaurant they like.”

 

Speakers also discussed the vision of a future where customers can personalise specific attributes when booking rooms, although the current lack of optimisation in this area and the need for technology integrations to improve the customer experience were acknowledged. “We are not ready yet; we lack data, we lack customer knowledge, and we lack many layers of technology that allow the PMS to break down the characteristics of the rooms and communicate with the channel manager and communicate with the web,” added Diego.

 

In relation to attributes, Reyes Mañeru emphasised personalisation: “the more you personalise, the more you increase customer satisfaction, and you have a better reputation; the more you increase loyalty, the more loyal the customer is.” These strategies were considered essential to stand out among sales channels and competitors, providing important competitive advantages in today’s dynamic hotel market.

 

The panel also addressed neutral pricing strategies and how they influence customer perception. The importance of understanding the type of product, the market and the target audience when applying Neuro Pricing strategies was emphasised. Speakers highlighted how the presentation of prices can significantly influence the customer’s purchasing decision.

 

The conversation drifted towards the future of pricing and total revenue, highlighting the importance of artificial intelligence, machine learning, and the impending Internet of Things (IoT) to deliver dynamic pricing and optimise profitability.

 

He highlighted the vision of a revenue manager with a global approach, considering that total revenue should go beyond accommodation, encompassing additional areas such as extras, and assessing the profitability of the hotel as a whole. In this sense, Diego Fernández added: “There are hotels where 40% of their production is in extras and 40% of production is not optimised in price because the menu is at the same price all year round. It doesn’t matter how busy the hotel is. The revenue does not have to be associated with the accommodation, but with the hotel.”.

 

The need to align the revenue team with financial objectives, use real-time data to attract more profitable customers and focus on strategic distribution channels was highlighted as key to future success in the hotel sector. Finally, the importance of adapting to emerging technologies and effective strategies to maintain profitability, and customer satisfaction was highlighted.

 

The panel provided an in-depth look at current and future trends in the hospitality industry, highlighting the importance of data quality, personalization, and adaptability to technological innovations.