Once you've set up Dynamic Pricing, Hospitable automatically sets your base price and applies adjustments based on market conditions and your property’s performance.
These adjustments can increase or decrease your nightly rate, while respecting your defined minimum and maximum rates.
Dynamic Pricing Formula
Base price + price adjustments (positive or negative) = nightly rate
Each adjustment reflects a specific demand signal. They are calculated independently and combined to produce your final nightly rate.
What Are Price Adjustments?
Price adjustments modify your base price to account for changing demand conditions. These include:
Local demand
Booking window
Seasonality
Weekday rate
Gap nights
Restrictions
Past pricing
Because adjustments are calculated separately, they can offset one another.
For example, December may have a negative seasonality adjustment (low season), while New Year’s Eve may have a strong positive demand adjustment. Even during low season, prices may increase if event-driven demand is high.
Price Adjustment Components
1. Local Demand
Demand adjustments respond to booking patterns and interest in your area.
What it measures: Increases in bookings or rising rates for specific dates in your market.
When it increases prices: During holidays, local events, or periods of high booking activity.
When it decreases prices: When booking activity slows in your area.
Demand adjustments respond to both predictable events (like holidays) and unexpected market shifts that might not be captured by seasonality alone.
2. Booking Window
Booking window adjustments reflect how far in advance a guest is booking.
What it measures: The time between booking date and check-in date.
When it increases prices: Dates more than six months in the future may receive progressively higher premiums.
When it decreases prices: Within one month of check-in, prices may gradually decrease to help secure bookings.
3. Seasonality
Seasonality adjustments account for recurring high and low periods throughout the year.
What it measures: Historical demand patterns in your market throughout the year.
How it works: Prices increase during peak seasons and decrease during slower periods.
4. Weekday Rate
Weekday adjustments reflect demand differences across the week.
What it measures: Demand differences between weekdays (Sunday–Thursday) and weekends (Friday–Saturday).
How it typically works: Weekends are often priced higher than weekdays, depending on your market.
5. Gap Nights
Gap night adjustments help fill short vacancies between bookings.
What it measures: Short, hard-to-fill gaps between reservations.
How it works: Applies modest discounts to these dates (for example, a 1–3 night gap). It does not modify your minimum stay requirements.
You can opt for a lower Minimum Night Stay setting in your Dynamic Pricing customizations for gap nights.
Why it matters: Helps increase occupancy by filling nights that might otherwise remain vacant.
6. Restrictions
If you see Restrictions as an attribution in your price calculation, it means the recommended rate has reached your pricing boundaries.
How it works: Automatically adjusts the recommended price to remain within your defined minimum and maximum price range.
Why it matters: Protects your pricing boundaries so recommendations do not drop below your break-even point or exceed your chosen ceiling.
Discounts, promotions, and markup rates are applied on top of Hospitable’s recommended price. Because of this, the final price shown on booking platforms may fall below your minimum or above your maximum.
7. Past Pricing
If you see Past Pricing as an attribution, it means the recommended rate is referencing your historical bookings for far-future dates.
How it works:
For dates 120+ days in the future, prices align with the rates you successfully booked for similar dates one year ago.
For dates 270+ days in the future, prices align with those same historical booked rates plus 10%.
Why it matters: This helps ensure that far-future pricing reflects what guests were previously willing to pay, rather than relying only on short-term demand signals.
Past Pricing increases rates to match the booked price from the same period one year earlier.
If your property has limited booking history, the impact of Past Pricing may be reduced.
How Often Do Prices Change?
Dynamic Pricing updates daily. Additional updates may occur when you change property details, pricing settings, or availability.
Why Is My Price Higher or Lower Than Expected?
Unusual price changes may result from:
A major local event increasing demand
Multiple adjustments combining (for example, high demand during low season)
Changes in your property’s recent performance
Unique features that market data may not fully capture
If needed, you can:
Adjust your base price
Change your pricing strategy (Conservative, Recommended, Aggressive)
Set a custom base price
Keep in mind that platform promotions, discounts, rule sets, and markup rates also affect the final price guests see.
Markets change constantly, and Dynamic Pricing reflects those shifts.
Tips for Maximizing Your Dynamic Pricing Strategy
Monitor performance: Review pricing periodically and adjust settings if needed.
Be patient: Evaluate performance over longer timeframes rather than reacting to short-term changes.
Adjust strategically: If occupancy is lower than expected, consider lowering your base price or switching to a more conservative strategy.
Dynamic Pricing manages daily fluctuations, but your knowledge of your property and market remains valuable in shaping your overall strategy.