Hotel Industry

Why do Hotel Prices Fluctuate?

Fluctuating prices

Ever wondered why hotel prices differ from day to day? You would have noticed that while booking your hotel online, the prices change when you enter different dates. While planning a vacation, always a second thought is given on scheduling the trip due to the fluctuating prices of hotel rooms. There are several factors which decide the rate of the room for a particular date.


Here are some of the main reasons that play a vital role for this:


Occupancy of the Hotel

The availability of hotel rooms play a crucial role in determining the tariff. Higher the demand, higher will be the subsequent prices. In the case of tourist destinations, the prices shoot up during season and vice versa. Also if an event or a summit is supposed to be held in the locality, the hotel strategically increases their room prices foreseeing the demand.

Occupancy of Hotel rooms



Prime location of tourist destinations may have a lot of hotels concentrated near each other. This results in very high competition among them, where they will try to provide the best deals possible. Prices will vary vyingly to attract customers but also keeping profit in mind.



The location of the hotel is one of the main factors that decide if the room is going to be costly or not. A hotel in the prime location will be of great convenience to tourists by being close to shops and restaurants, thereby increasing its demand and cost. Also, the hotels within reach of all tourist attractions is preferred over ones located in remote places even if the hotel provides city tours as the former saves a lot of time.

Good Location



The time of the year when you are booking the hotel also determine how much you will be paying for it. The prices tend to be higher during the months when the weather is pleasant and free of rainy/snowy days. This period attracts maximum number of tourists causing the prices to go up. Similarly, planning a vacation off season will help you save a lot money.



A hotel is reviewed as a good or a bad one on the basis of amenities and quality of services it provides. This is the obvious reason behind a 5 star hotel being way more expensive than a 3 star hotel. If the hotel doesn’t continue providing the same quality of service, a few negative reviews are enough to stop customers from booking that hotel and resulting in the hotel losing its star ratings along with the decrease in tariff.



Day of the Week

Booking a hotel on a weekday proves way cheaper than doing the same on weekends as many tourists may be from nearby places who prefer a weekend getaway. Many people also prefer to keep weddings and other functions on weekends which may lead the hotels to be overbooked.



On a parting note, hotels need to harmonize their pricing with the demand. When it is high, hotels make sure they price the room strategically based on competition, local events and vacation schedules of tourists. On the other hand, when demand is low, hotels provides deals attractive enough to make sure none of the rooms are left out empty. The outcome of this varying demand is the highly capricious and fluctuating prices of hotels.