In Las Vegas, the law of supply and demand has been practiced, and ticket prices from hotels to Las Vegas Raiders may fluctuate during notifications during busy weekends. These price adjustments are also made in those ubiquitous hall stores that sell everything from liquor to fries and bottled water. According to Las Vegas Review-Magazine, surge pricing or dynamic pricing is popping up in various hotels in Las Vegas.
This means a bottle of water that could cost $6 on Tuesday could cost nearly $7 on Friday. Review Magazine sent its summer interns to six properties in the strip, including Bellagio, Caesars Palace, Hara and MGM. They found a surge in pricing model for products ranging from sunscreen to energy drinks at work.
It’s no secret that desert gambling and entertainment hubs are obvious with tourists declining. But, given that some resorts try to attract guests by giving up one of the most popular attachments on any bill (the resort fee), why do some hotel academies dynamically price small impulse purchases made in the lobby?
Because it can be very profitable. Automatic point-of-sale system means hotel grocery stores can immediately update the price of any quantity of items, turning bottles into profit engines.
Algorithmic pricing is quite common in the digital economy era. If you use Uber, your price experiences a surge in price when you try to book a ride during busy hours. Airlines and hotels use dynamic pricing based on factors such as demand, capacity and booking time. This practice has also been established in the concert industry, where fares can jump higher according to demand.
Related: Create Dynamic Pricing for You: How Rebooking a Hotel Helps You Save Reward Nights
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A recent National Retail Federation blog post defends dynamic pricing, which is a “natural expansion of long-term retail practices.” It believes that modern technology allows retailers to quickly adjust prices to illustrate market changes. “Consumers benefit directly from this development,” wrote Mike Lemon, vice president of legal affairs at NRF. “Pricing has become more efficient, more competitive and more responsive to market reality.”
Las Vegas always leads the curve in new ways. Most hotels on the strip don’t have coffee machines in the room, so you have to dress up, go downstairs and spend $8 to buy a regular cup of coffee. The resorts and stiff fees in parking lots are just two examples of novel ideas that have become common practices in striptease to squeeze more money out of guests. Dynamic pricing for lobby stores could be the next new thing.
“The dynamic pricing of Vegas hotel stores is a natural expansion we have seen in travel and e-commerce,” said Uri Abramson, founder of DataSonic and CashAdvanceapps.com. “When demand spikes (for example, in a convention or heat wave), the prices of essentials like water or sunscreen surge in real time.”
Vegas real estate must be concerned about the risks of transparency or alienating customers, Abramson said. “Unlike flights, consumers won’t expect a bottle of $6 water overnight to $9,” he noted. “As the AI pricing model becomes easier to use, we may see it expanding to more retail environments, especially with customers being captured and convenient.”
However, for some, the surge pricing using soda and snacks may be too far. After all, most people visiting Las Vegas don’t mind the “VIG” that bets on casino sports betting, which is “VIG”. But paying a few dollars for a can of beer just because you buy a few dollars in the time of day can be a bad thing for guests.
There is a fairly simple way to avoid the dynamic pricing dilemma. All you need to do is step out of the casino and hit the CVS or Walgreens on the Strip. There are several options to choose from, unlike the stores in some hotel properties, where prices remain the same, in the morning, at noon and at night.
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