Dynamic pricing has extensive application across many industries, from accommodation and flights to tourism, ride sharing, and online retail.
Companies like Uber use surge pricing, while Amazon is known for repricing millions of items frequently based on demand.
Ferries typically adopt some form of dynamic pricing, but many limit its application to increasing prices at the beginning of the high season.
What is Automated Dynamic Pricing?
Dynamic pricing can mean different things depending on how it is applied.
- Different prices for different days, such as a cheaper Tuesday fare or directional pricing
- Seasonal pricing, such as increasing prices by 15% at the beginning of high season
- A combination of seasonality, day-of-week pricing, occupancy, and time before departure
Automated dynamic pricing goes further by using algorithms to adjust prices automatically based on parameters set by the operator.
This removes the need for manual, human-driven pricing adjustments and reduces the reliance on ongoing human oversight.
Is Automated Dynamic Pricing Good for the Customer?
Since the introduction of hybrid and full-time work-from-home arrangements, many operators have experienced a smoother demand curve between their busiest and quietest periods.
Peak and off-peak pricing can encourage flexible customers to travel at less popular times, helping to fill sailings that would otherwise have lower occupancy.
At the same time, the most popular trips can be priced for customers who are less flexible and more willing to pay for their preferred departure.
This can also mean that popular trips, which may usually book out far in advance, remain available closer to departure for last-minute travellers.
Dynamic pricing can also reward early booking. Customers who book early often receive the best price, which is generally seen as a fair and familiar model.
However, operators should also consider fairness. Dynamic pricing can risk marginalising customers who cannot afford peak-time travel.
Measures such as promised pricing on selected departures or resident discounted rates can help balance revenue optimisation with community access.
Is Automated Dynamic Pricing Good for the Business?
For ferry operators, the answer is generally yes.
Automated dynamic pricing helps optimise the yield of every departure. Ferry operators work with fixed capacity and relatively fixed underlying costs, so stronger utilisation can improve return on investment.
Dynamic pricing enables ferry operators to practise yield management by selling the right number of spaces at the right price on each sailing.
One less obvious benefit is the potential for a greener service. Higher utilisation can reduce the number of departures required to move the same number of people.
Automated dynamic pricing is a powerful tool that can help reduce emissions, increase yield, and provide better service to customers.
FerryHawk can help unlock new levels of efficiency and customer loyalty.
Explore how FerryHawk can transform your ticketing system with smarter pricing tools designed for modern ferry operations.