«As in economic theory, if the price of the product is increased, the price will exceed the willingness-to-pay level of some customers and demand decreases. If the price is decrease, the product price drops below the willingness-to-pay level of more customers, and demand increases. This theory is the basis for price optimization.
In price optimization, demand for a product is estimated as a fuction of price, and the price becomes the decisión variable that is used in maximizing revenues or margin. So, as opposed to protecting rooms for higher-paying guests, like classic revenue management models would, price optimization determines the optimal single price to change the broader market (unqualified demand), considering that demand changes as the price changes.»
Hotel Pricing in a Social World-Kelly A. McGuire