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Dynamic rates are set discounts off some floating base rate, say 20 per cent off the corporate rate, or a rate range, say $165 to $195. The system replaces the discounts hotels would give conference organisers and allows the hotel groups to capitalise on bullish trading conditions and tightening supply.

Conference planners also now find themselves in a situation where rooms are being contracted 18 to 24 months out from an association meeting and delegates are waiting to the last minute and securing rooms at a significantly cheaper rate by going direct to the hotel for their accommodation needs.

Robyn Johnson of Conexion Event Management in Sydney says they are experiencing the situation where hotels won’t give them a commission even if they know their guest is attending a conference.

“We’ve promoted their hotel in the registration brochure, organised and marketed an event that has brought the delegate to the host city yet there is no recompense,” she says.
Ms Johnson says there has been a big drop in the number of delegates to international conferences using her company’s booking service.

“We’ve had upwards of 50 per cent of delegates sorting out their bookings through us. Today we find we’re looking at between 20 and 30 per cent as they’re going direct to hotels.
“The irony is that if the delegates have a problem with their accommodation, they come to us to sort it out.”
Accor Australia, the largest hotel group in the country, has converted some 60 per cent of its corporate customers to the dynamic pricing model and is applying it across its various brands which include Sofitel, Mercure, Novotel and Ibis.
“The days of rack or static rates are over,” says Mark Pollard, director of corporate sales for Accor.
“For instance, the Novotel Glen Waverley in Melbourne could probably fill their rooms twice Monday to Thursday, but struggle on Friday to Sunday, so why would you charge the same rate given the massive difference in demand?”
So what happens now is that XYZ company will agree to a dynamic rate formula with a guaranteed discount on the rate of the day. Even if the ABC hotel was down to its last few rooms, XYZ company would get the room and their pre-agreed discount. General manager of ICMS Australasia, Emma Bowyer, says dynamic pricing is pure “supply and demand” economics conducted in real time.

“Dynamic pricing is a means where hotels attempt to control the supply/demand curve and yield manage the variances. It will never replace the excellent customer service we can deliver and the ability to change and be more flexible with a real person,” she says.
“Typically delegates will compare rates with the hotels as compared to us. So long as dynamic pricing offers PCO some advantage we should see an increase in percentage of delegates booking.
“We are more actively marketing our relationship with hotels and leveraging better deals in the hope that delegates will book through us rather than direct to hotels.”
Ms Bowyer says hotels vary in the level of co-operation with conference organisers.
“Like everything else in life, some are more co-operative than others.