Economics has a concept called "Third-Degree Price Discrimination": charging different prices to different groups, while keeping prices uniform within each group.
Student movie tickets, senior citizen transit discounts, flexible business class fares — all are forms of price discrimination. The key isn't that the word "discrimination" sounds unpleasant — it's that this approach lets businesses capture revenue from customers with different willingness to pay.
Airlines are the grandmasters of this. On the same flight, the first row of economy costs NT$8,000, the last row NT$3,500. Both prices exist simultaneously on the same plane, and no one feels cheated — because they're "different products" (different seats, different flexibility).
Your empty rooms are the same. The NT$3,500 official rate for a Tuesday night and the NT$2,500 flash sale rate aren't "a price cut" — they're "different products." The flash sale price comes with restrictions: time-limited, quantity-limited, and requires a deposit.
The key concept is "price isolation." The same room, sold through different channels, under different conditions, with different packaging, to customers with different willingness to pay. The business traveler willing to pay NT$3,500 books through the official website. The budget-conscious traveler only willing to pay NT$2,500 books through the flash sale. Neither feels cheated — because they bought different "products."
What if you don't isolate? All customers see the same price. Those willing to pay NT$3,500 pay NT$3,500. Those only willing to pay NT$2,500 don't book — the room stays empty. You lose that NT$2,500 in potential revenue.
Price isolation lets you capture both high-willingness and low-willingness customers simultaneously. And empty rooms — inventory that becomes worthless tomorrow — are the perfect target for low-willingness customers.
