Dynamic Pricing Rules help parks to maximize Site Revenue through Campspot. Below, learn best practices and the answers to general questions.
New to Dynamic Pricing in Campspot? Use this article along with the following articles to get the best understanding of how this feature can increase your bottom line!
Dynamic Pricing: Setup New Variation
Dynamic Pricing: Functional Examples
Dynamic Pricing by Site Type
Dynamic Pricing by Reservation
When it comes to Revenue Strategy, there is no such thing as a guarantee. There is no guarantee rates have been increased enough to reflect future demand. There is no guarantee the strategy accounted for that concert that popped up. There is no crystal ball that can properly support the strategy driving a rate decision.
Campspot offers a built in Dynamic Pricing feature that will adjust your rates based on Occupancy, time of of the year, Site Category, Site Types, and more - all decided by you.
Q: What is Dynamic Pricing?
Dynamic Pricing automates your ability to change the base rate of a Site Type based on occupancy levels and time of booking, also known as Booking Window. Traditionally, Dynamic Pricing is used to increase rates when occupancy is high. Campspot's Dynamic Pricing tool not only allows you to increase rates, but you can also offer lower rates to generate business leaving you with a ton of options to fulfill your Revenue Strategy.
Q: Why should I consider using dynamic pricing?
Parks on Campspot that are using Dynamic Pricing rules have a 191% higher average revenue compared to parks not using these rules. Just by using your understanding of your parks seasonality and the rules in Campspot, you can be significantly increasing the money you take to the bank.
Q: Can Dynamic pricing be increased incrementally?
By setting up multiple rules, leveraging occupancy and/or booking window triggers, you can create incremental increases manually.
What does that mean?
Take the example below. A park operator wants to increase the prices of the most popular sites by setting various occupancy thresholds to incrementally increase rates as demand increases and inventory decreases:
- 50-59% Occupancy = +5% rate increase
- 60-69% Occupancy = +7% rate increase
- 70-79% Occupancy = +10% rate increase
- 80-89% Occupancy = +12% rate increase
- 90-100% Occupancy = +14% rate increase
Once that occupancy threshold is met, the previous rule does not apply, and the next rule kicks in. If occupancy is at 55%, the base price will automatically increase by 5% but when it hits 60%, the base price will increase to 7%.
Q: What is the most common Dynamic Rule used?
If you are not interested in setting multiple rules for that incremental increase, the most common single rule is to:
Increase the base price 20% when occupancy reaches 90-100%
Q: How does Booking Window come into the picture?
One part of the Dynamic Pricing setup is setting how many days prior to arrival this rule applies. Depending on your strategy, this function can really narrow down your rate planning to fit your needs.
Example: You want to increase RV rates through next December by 10% once occupancy reaches 50%. The part of the Dynamic Pricing new variation rule form, "and is booked __ to __ days prior to arrival" would be used to define the Booking Window.
Example: You want to lower RV rates to fill empty sites for any guest booking last minute, 3 days prior to arrival. The rule would use 0 - 3 days prior to arrival.
Q: How does Dynamic Pricing affect Package Pricing Rules?
If Variable Rate Package Pricing is setup and can apply to a reservation, Dynamic Pricing Rules will also apply to the reservation.
Example: Dynamic Pricing Rule applies a 5% rate increase and a Buy 6 Nights Get The 7th Night Free rule also applies. The nightly price of the 6 nights have the 5% rate increase applied and the 7th night of the reservation will be free.
If Fixed Rate Package Pricing is setup and can apply to a reservation, Dynamic Pricing Rules will not apply to the reservation as the fixed rate will 'override' the other rate changes.
Example: A Monthly Fixed Rate package at $500/month will remain at $500/month even if a Dynamic Pricing Rule could increase the rate by 5%.
Q: What if I have a handful of cancellations? The occupancy % falls below the threshold for the rule to kick-in. Will new reservations have the higher rate or the original base rate?
Until the threshold has been met again, the rule will not apply to new reservations. Reservations that were made when the parameters of the rule were met, would still qualify for the new rate until the reservation were edited and new rates accepted.
Reporting and Dynamic Pricing
You know your park better than anyone. However, looking at performance data can create a better strategy than gut feelings. What resources are available to you in Campspot to help support your strategy with data?
Was a site booked or not? Yes or no. That is the basic calculation for occupancy. Campspot bases Dynamic Pricing off Site Type performance. So the occupancy for a Site Type would be the number of nights the sites within the Site Type were reserved divided by the total number available.
Example: A Site Type has 10 sites. For April 4, 5 of those sites were booked - occupancy was 50%. For the entire month of April, there were 120 nights booked of the available 300 (30 nights at 10 sites per night) - occupancy was 40%.
Campspot has a report that will give you the data needed to create your strategy:
Daily Revenue and Occupancy by Site Type
To run this report, select the date range you would like to find performance for and click Run Report.
For more information on this report, click here.
Dynamic Pricing Revenue
To view your Dynamic Pricing Revenue data you can download and view either the:
Dynamic Pricing Revenue by Reservation report
Dynamic Pricing Revenue by Site Type report
To run either report, select the date range you would like to find performance for and click Run Report.
These reports will provide performance detail on how your Dynamic Pricing rules perform including the amount of money the rules impact. The reports include the following data points:
- Site Category
- Site Type
- Dynamic Price Impact
- Additional Information on the: Dynamic Pricing Revenue by Reservation report
- Site number
- Confirmation #
- Reservation Start & End dates
- Date (within Period)
- Promo Code
- Package Modifier & Value
- Dynamic Price
- Base Price
If using the Dynamic Pricing to create business by offering lower rates based on seasonality, the Dynamic Price Impact will show as a negative. Is that a bad thing? Depending on your strategy, you would expect to see negative results for these rules.
Another factor that would report negative results is if you are using package rule discounts or length of stay discounted rates.
For more information on how to increase your parks revenue using Dynamic Pricing, click on the following links:
Dynamic Pricing: Setup New Variation