I have been playing around with flexible prices for a few years now.
If you price higher in the last few weeks and manage to rent out all rooms, it may mean that you priced too low at the beginning. You may have sold several rooms too low & lost some extra income opportunity.
On my side, I first have a very detailed analysis of the occupation ratio and prices of the previous years (important to keep stats). Based on this, I have sliced up in different price sections for each of our 3 rooms, for 6 "seasons", week day/week-end, direct/indirect booking. For each section, based on history, I have set the ideal price that should allow to get the optimum profit. Then, every 2 weeks, I analyze how the coming month are filling up and decide to adjust these prices up or down if or as required. I often end up putting down prices for last minute booking of the remaining rooms (knowing that first ones went higher). Prices for a couple with breakfast range from 66 to 164€. The highest is the easiest to sell !
This method allows me to ensure I do not sell too low and helped me increase turnover.
I admit I do not fully understand why airlines/big hotels proceed differently. I suspect that the N° of seats/rooms may bring a different thinking. Starting with a lower price mean they can ensure their break-even line will be reached. Higher final prices are seen as a bonus.
What is your take ?
I do not show prices ranges on the website. Visitors need to enter the date to view the prices. This way, they do not know wether they paid a high price or not..