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In the attribute-based pricing approach, rather than defining room types and rate types, the inventory is broken down into components or attributes.

  • Room attributes are things like King or Queen bedding, floorplan, floor location, view, or guest occupancy.
  • Rate attributes include advance-purchase or add-ons like breakfast.

A base room rate is defined, and for each attribute, the base rate is either marked-up or marked-down. Pricing management in this approach moves from managing large numbers of rate products (by room type) to managing the base rate and the mark up/down differentials for the various attributes, which could mean a significantly smaller number of individual prices.

Many believe that the ability for the consumer to search for exactly what they desire, and only pay for what they value, will not only improve the customer booking and stay experience but will drive revenue and profits as well. Attribute-based selling facilitates the search process, making it more like shopping on retail sites, removing friction and adding flexibility. Many point to airline companies’ success with unbundling (a similar initiative that drove significant profits for that industry) as a reason to believe that an attribute-based selling and pricing model offers significant revenue opportunities for hospitality, as well.

However, broad implementation of the attribute-based pricing model in hospitality will not be easy. Core hospitality technology systems including PMS, CRS, website and RMS will need to be overhauled to handle his change. Third-party distributors will need to adjust their internal processes, or risk being out of parity.

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