Pricepoint’s AI generates pricing recommendations at the room type level (e.g., Double Room, Triple Room), analyzing each type’s performance, booking trends, and customer behavior independently for the next 365 days. Here are the three key approaches to room pricing in Pricepoint:
Open Pricing (Default)
How It Works: Each room type is priced independently, with no relationship to other room types. Pricepoint aims to optimize revenues for each type by dynamically adjusting prices based on real-time demand and performance.
Why It’s Effective: Open Pricing eliminates constraints, allowing each room type to achieve its optimal price without compromises. This method is particularly suited for maximizing revenue and efficiency.
Unit count matters: Open Pricing works best when a room type has enough units for the AI to observe meaningful occupancy variation — ideally at least 4 units. With only 1 unit, the room is always either 100% or 0% occupied, which gives the AI very little signal to adjust prices from, limiting how effectively it can optimize that room type.
2. Room Tiering
How It Works: Open Pricing is applied unless room type prices overlap. If overlap occurs, tiering ensures premium rooms remain priced higher than less expensive types.
Example: If a Double Room reaches $100 due to demand and a Premium Suite is also $100, tiering increases the Premium Suite price to maintain a price gap.
Risk: Tiering can inflate prices for underperforming rooms, as their prices adjust based on the performance of other room types rather than market conditions.
3. Room Grouping
How It Works: Establishes a fixed price relationship between room types. For example, a Premium Suite price might always be $20 higher than a Double Room price.
When to Use: Best if you want a guaranteed, consistent price difference between two room types (e.g., "Premium should always be $20 more than Double") — Grouping is the only approach that enforces this at all times, not just when prices happen to overlap. It's also useful for room types that are nearly identical, or that have too few units for Open Pricing to work well on its own, as long as there's a comparable room type to group with.
Trade-off: For distinct room types, grouping compromises optimization. Only the parent room is optimized, while child rooms follow blindly, reducing individual revenue potential.
Choosing the Best Approach
Open Pricing Open Pricing is the default, and works best with enough units per room type (ideally 4+) to give the AI meaningful demand signal. Grouping is usually better for low-unit or near-identical room types, as long as there's a comparable room type to group with. Tiering mainly serves as a safeguard against price overlap between distinct room types, rather than a primary strategy.
Your room type structure is typically defined during onboarding with your Onboarding Agent.