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ENWhen the "right price" is more than just a number
For many years, Dynamic Pricing has been considered one of the most significant advancements in hotel Revenue Management. Instead of maintaining a fixed rate, hotels continuously adjust room prices based on market demand, seasonality, day of the week, occupancy levels, booking lead time, and competitor pricing.
This logic has transformed how hotels manage revenue. However, the market is now posing a new question: does the optimal price for a room truly depend solely on supply and demand at that specific moment?
Imagine two guests searching for the same room, on the same check-in date, and for the same room type. One is a new guest visiting the website for the first time. The other is a returning business traveller, booking last-minute, and tends to purchase breakfast, airport transfers, or late check-out. If the system only considers the date, occupancy, and competitor rates, both guests will receive almost the same pricing logic.
However, the commercial value of these two sales opportunities is clearly not identical.
This is precisely the gap where Contextual Pricing begins to emerge.
If Dynamic Pricing answers the question “What is the current market demand?”, Contextual Pricing takes it a step further to ask “In this specific context, what price and offer are most likely to generate the best value for both the guest and the hotel?”
Dynamic Pricing: A Big Step, But Not the Final Destination
Dynamic Pricing is based on a relatively simple principle: prices must reflect changes in demand. When demand surges, prices can increase. When demand is weak, prices can decrease or be accompanied by promotions. When a major event occurs at the destination, the system can forecast increased demand and adjust prices before occupancy actually reaches high levels.
This is a crucial foundation of modern Revenue Management. However, traditional Dynamic Pricing often focuses on market context: stay dates, lead time, pickup, occupancy, seasonality, events, competitor pricing, and historical demand.
Meanwhile, customer behaviour is becoming increasingly complex.
In its 2026 Travel Industry Outlook , Deloitte notes that consumers are becoming more cautious about the frequency and duration of trips amid cost pressures, while travel businesses must continue to find ways to reach the right customers with the right offer at the right time. Deloitte also suggests that GenAI is opening up possibilities for real-time offer personalisation, including add-ons, dynamic pricing, and merchandising based on context, timing, and traveller behaviour.
This is where Dynamic Pricing is evolving. It's no longer just price optimisation, but offer optimisation.
What is Contextual Pricing?
Contextual Pricing can be understood as a method of pricing and designing offers based on the entire context of a transaction, rather than solely on market supply and demand.
This context can include booking time, trip purpose, length of stay, booking channel, transaction history, loyalty level, search behaviour, room type of interest, likelihood of purchasing additional services, time remaining before check-in, and ongoing market signals.
Crucially, Contextual Pricing does not necessarily mean every guest sees a completely different room rate. In many cases, a more appropriate approach is to maintain transparent base rates but vary the offer structure.
One guest might receive breakfast included. Another might get a late check-out. A group of guests might receive a room package plus airport transfer. A loyal guest might receive an upgrade offer. A guest needing a long stay might receive a long-stay benefit instead of a direct room rate discount.
Thus, businesses are not just optimising price, but optimising transaction value.
From "Room Rate" to "Transaction Value"
This may be the most significant shift in Revenue Management thinking.
If only optimising room rate, the goal is typically to find the price that maximises room revenue under specific demand conditions. But when viewed at the transaction level, revenue can come from various sources: room, breakfast, F&B, spa, transportation, upgrades, late check-out, activities, meeting packages, and other ancillary services.
A guest paying VND 3 million for a room but purchasing an additional VND 1 million in services may generate different commercial value than a guest paying VND 3.3 million for the same room but not using any additional services.
Therefore, a lower price does not necessarily create lower value, and a higher price does not automatically create higher value.
Deloitte recently emphasised that Revenue Growth Management in hospitality needs to shift to a more comprehensive approach, combining pricing, promotion, loyalty, customer experience, and various value levers instead of relying on mere price increases. According to Deloitte, understanding price elasticity along with "where consumers are" forms the basis for more targeted pricing decisions.
This is the foundational thinking behind Contextual Pricing.
Vietnam is entering a market where customers can compare prices very quickly.
Contextual Pricing can only thrive when customers are accustomed to searching for and comparing information in the digital environment.
According to Q&Me, 79% of online booking and travel service users surveyed travel more than once a year. Desktop and mobile websites are popular channels for booking services; ease of discovery on search engines, user-friendly interfaces, and good prices or promotions are the top three factors when choosing a travel website. The Q&Me survey was conducted with 319 individuals aged 18 and above nationwide.
This creates a paradox.
Customers are more likely to compare prices, but at the same time, they have more diverse needs. If hotels only compete by constantly lowering prices to appear more attractive on OTAs, profit margins can come under pressure, and the brand risks being drawn into a price war.
Contextual Pricing opens up a different approach: not necessarily cheaper, but more relevant.
A good offer can beat a low price if it precisely addresses the customer's needs.
AI is transforming Contextual Pricing from an idea into operational capability.
While first-generation Dynamic Pricing relied heavily on rules and forecasts, Contextual Pricing demands the ability to process a larger volume of signals more rapidly.
This is where AI and machine learning become crucial.
Kantar reports that 40% of global travellers in their study have used AI tools for trip planning, and 62% are willing to use them in the future. One of the most compelling reasons for AI travel tools is their ability to provide suggestions tailored to individual preferences, budgets, and travel styles. This has significant implications for pricing.
When customers use AI to search and compare thousands of options, they no longer simply ask "which hotel is cheapest?". They might ask: "which hotel is best for my trip?", "what's the best option within this budget?" or "find me a hotel with a spa, breakfast, and late check-out in price range X".
As the decision point shifts from price search to value matching, hotels also need to transition from price optimisation to contextual offer optimisation.
Deloitte also points out that GenAI is enabling travel providers to personalise offers in real-time based on timing, context, and traveller behaviour.
Contextual Pricing will change how Sales & Marketing operates
When pricing becomes contextual, Sales & Marketing can no longer operate separately from Revenue Management.
Marketing can identify which campaigns generate traffic. Revenue knows which days require demand. CRM knows which customer segments are likely to return. Sales knows which corporate accounts are increasing their needs. Operations knows which outlets have available capacity.
If this data is connected, hotels can shift from campaign-based selling to signal-based selling.
Instead of running a 15% discount for the entire market, hotels can identify the customer segment best suited for a specific offer and deliver that offer at the right time.
This is particularly important as acquisition costs increasingly become a major variable. An offer with a high conversion rate but high OTA commission may not generate as much value as an offer with a slightly lower conversion but sold through a direct channel.
Context, therefore, is not only about the customer. It also lies in the economics of each channel.
Hospitality is moving from Dynamic Pricing to Contextual Pricing
Dynamic Pricing helped hotels answer a crucial question: “What price is appropriate for the current market conditions?” Contextual Pricing poses a deeper question: “Within the specific context of the customer, market, sales channel, and inventory, which offer generates the best value?”
This is not a complete replacement for Dynamic Pricing. On the contrary, Dynamic Pricing is a crucial foundation for Contextual Pricing.
The difference lies in the scope of data and optimisation goals. Dynamic Pricing optimises price. Contextual Pricing optimises the value of the sales opportunity.
And as hospitality increasingly shifts from "room centric" to "guest centric", from transaction to relationship, from occupancy to total guest value, this could become the next step in Revenue Management.
In a market where customers can compare prices in seconds and AI can compare thousands of options in moments, competitive advantage will not simply lie in hotels offering lower prices.
The advantage may lie in the ability to better understand context and provide more suitable offers.
NewSun Hospitality: From Revenue Management to Commercial Strategy
Contextual Pricing should not be implemented as a standalone technology project. This is an issue related to Business Model, Product Definition, Pricing, Distribution, CRM, Sales & Marketing, Operations, and Digital Transformation.
For each hotel and resort project, the question to be asked is not just "what is the right price?", but which customer, in what circumstances, through which channel, with what needs, and what total value is being generated.
NewSun Hospitality partners with investors and hospitality businesses from market research, business model development, product definition, commercial strategy design, to operational implementation and digital transformation. This approach helps connect Revenue Management with the broader challenge: creating the right product, selling to the right customer, through the right channel, at the right time, and at the right value.
Dynamic Pricing can help hotels sell a room at a better price. Contextual Pricing aims to help hotels gain a deeper understanding of the revenue opportunities behind each customer.
This could be the shift from Revenue Management to Revenue Intelligence, and from market-based Pricing to context-based Pricing.
- Hotline: +84 768 68 2913
- Email: dosm@nshm.com.vn
- Zalo OA: https://zalo.me/2452770272256938463 (NewSun Hospitality)
- Website: https://nshm.com.vn/ (NewSun Hospitality)
References
- Deloitte. (2026, February 5). 2026 travel industry outlook. Deloitte Consumer Industry Center.
- Deloitte. (2026). Revenue growth management in the restaurant and hospitality industry. Deloitte.
- Deloitte. (2026, January 14). The future of hospitality: Navigating new frontiers. Deloitte.
- Deloitte. (2026). Converge: Travel and hospitality. Deloitte.
- Decision Lab. (2026, May 15). The rise of independent travel in Vietnam is changing how destinations, airlines, and tour brands compete. Decision Lab.
- Kantar. (2026). When machine meets wanderlust: The role AI plays in tourism. Kantar.
- Q&Me. (n.d.). Vietnamese online travel behaviors. Asia Plus Inc.
- Savills Vietnam. (2025). Ho Chi Minh City market brief Q1/2025. Savills Vietnam.
