What is the meaning of time based pricing in the hospitality industry?
The term time based pricing refers to a method of pricing that charges its customers according to time. This stands differs from value based pricing – whereby the company charges its customers according to value delivered. The Time-Based Pricing Method is the standard in the tourism industry where customers are charged per night. Whereby prices fluctuate depending on what time they are being booked. With higher prices are charged during peak season, or during high demand times (conference and events).
Outside of the hospitality industry, in consultancy for example Time based pricing might not always be the best option as the faster you work, the less you get paid. Thereby the client will always want you to work less – while the organisation aims to take longer as thereby revenues increase. With opposite goals, this is a affair heading for doom. Clients will be less inclined to contact you for your services as it will cost them for every minute.