Demand-based pricing is not discounting and it is not surge pricing. It is the recognition that a seat on a departure leaving on Saturday is a different product from the same seat six weeks out, and that the right price for the last nine seats depends on how full the trip is and how soon it goes. This page is about running it deliberately on a small operation, written for an owner with one published price and a nagging sense that August is under-charged and February is over-charged.
The two variables that actually matter
Load and lead time. How full the departure already is tells you how much demand this particular trip has attracted; how close it is tells you how many more chances you have to sell the rest. A trip that is two thirds sold a week out is a trip that will likely fill, and pricing the last seats at the published rate leaves money on the table. The same trip two thirds empty a week out is a different decision entirely.
It has to move both ways or it is just discounting
The commonest failure is an operator who only ever discounts, which teaches regular guests to wait and turns the published price into fiction. The worked example on this site, with fifteen of twenty-four seats sold and a week to go, asks for MORE than the published price, not less. If your rule never raises a price, you do not have demand-based pricing, you have a sale.
Three rules that keep you out of trouble
First, the price moves with the departure and never with the person: everybody looking at that trip at that moment sees the same number. Second, there is a floor, and it is never below what carrying one more guest costs you. Third, the guests already booked do not get charged more, ever. Those three keep the practice defensible when a repeat customer notices, which they will.
Where the parity rules bite
If you sell through marketplaces, most expect the same price across channels, so a price that moves has to move everywhere at once. That is an argument for doing it in the booking system rather than by editing a page, and against doing it at all if your channel connections are one-way. The free seat price worksheet on this site gives you the number; making it land on every channel in the same minute is what the software is for.
Start with one departure a week, not the whole calendar
Nobody should change every price on day one. Pick the departure that is most often nearly full, run the worksheet on it every Monday for a month, and see what the extra revenue looks like against the bookings you might have lost. A month of doing it on one trip teaches you more about your own demand curve than a season of theory, and it is small enough that a mistake costs a few seats rather than a reputation.
Questions people ask about demand-based pricing
Is demand-based pricing the same as discounting?
No. A discount only goes down; demand pricing moves in both directions, and on a departure that is filling fast it should go up. If your rule has never once raised a price, what you are running is a sale with extra steps.
Will regular guests notice the price moving?
The ones who book often will, which is why the price must move with the departure rather than with the person, and why anyone already booked is never charged more. Those two rules make the practice explicable when somebody asks.
How low should the last seats go?
Never below what carrying one more guest costs you, and usually a good deal above it, because a seat sold cheap to somebody who would have paid full price is a loss you never see. The worksheet on this site enforces both your floor and your cost per guest.