What is dynamic pricing and how does it work?

Dynamic pricing updates your offer in near real time and responds to supply, demand, and competitive signals. It usually follows three steps: Gather data: inventory levels, booking pace, competitor rates, customer profiles. Feed the data into an algorithm that estimates willingness to pay at any moment. Push the recommended price to your sales channels automatically, with guardrails that prevent wild swings. Therefore, customers who buy during low‑demand windows see lower prices, while peak periods capture a premium, helping you maximize revenue without manual effort.