Room rate is diverse and it is an important field in hotel business, which you need to know well about to increase revenue efficiently. There are some room rate types only applied at a specific point of time and they make a great impact on urging room sales. Below are some typical types of room rate that Hotel Link has selected for your reference to add to your strategy.
Rack rate is the original price for a specific type of room, which doesn’t include any discount or further services besides room service.
Rack rate is published and applied in all the legal documents of the hotel. It is the base price for obedience to the government’s tax policy.
Based on rack rate, hotels could create different ranges of discounted prices.
Special rate is the room price that has been discounted by percentage based on the rack rate. This rate is applied on special guests, such as:
- Long-term accommodation.
- Regular guests, who usually use hotel services.
- Guests from the hotel’s partner companies.
- Family with kids (kids under 12 years old are usually applied to this rate)
Corporate rate is offered for companies and corporations which are frequent suppliers of hotels.
This rate can be varied depending on the service that the corporations provide for the hotel.
Like special rates, the group rate is discounted based on the rack rate, but the difference is that it is applied for a certain big number of guest reservations.
Group rate is often applied in the guest cases, such as:
- Service and tourism companies
- Conferences, seminars, …
Promotional rate is usually applied during low season or hotel’s special occasions.
Besides offering promotional rates, many hotels can add more conveniences as the promotion services such as: free buffet dinner, free Wifi, …
This rate type is effective for attracting more guests in the low season as well as raising the hotel’s revenue.
Incentive rate is the rate for individuals that belong to some associations related to the hotel, or ones that own membership card, credit cards such as: VISA card, MASTER card, AMEX card.
Among different room rates, incentive rate is potential to be used for guests from referral companies.
Early Bird Rate
Hotels will have an early booking rate, often called Early Bird, for customers booking before a specified number of dates, which can be 1 week, 2 weeks or 1 month in advance,…
Early Bird helps hotels gradually fill empty rooms and maximize revenue, while customers can choose the room and service that suit their needs at a good price without scrambling with anyone. This is a pretty effective free marketing tool for hotels.
To apply this rate optimally, you should analyze carefully when to launch this offer, the number of days to book in advance with the appropriate discount based on the business situation of the hotel, and combine media channels extensively on hotel channels to reach more tourists and gain the large registrations.
You can encourage customers to use other services at the hotel such as health care, car booking, entertainment, dining,… when offering a package price.
The total package price will be lower than the total price of separate services, therefore, it will attract many customers. Meanwhile, the hotel will achieve the goal of maximizing revenue through this rate because it can sell many services at the same time.
Best Available Rate – BAR
When it comes to the hotel’s must-know room rates, we can’t ignore the Best Available Rate.
Best Available Rate is divided into 2 types: Dynamic Rate and Daily BAR.
Dynamic Rate has several levels, this rate would be applied or discontinued based on the hotel’s occupancy rate.
You can flexibly change the room rate based on the customer’s booking rate.
In case there are few bookings, you can offer deeper discounts to attract customers and vice versa.
Daily rates are pre-set rates for each room type combined with occupancy rates.
Daily rates are determined by day of the week, by forecast of room demand, by season, by demand of hotel room types or by special days.
There may be some hotel rooms that are used for private purposes, these rooms will be charged at no cost and are known as Internal Rates.
Tracking rate is a rather special type of hotel room rate, which is based on a different rate or Group Rate.
Example: Dynamic Rate-01 is calculated based on a 10% reduction in Rack Rate.
Generally, there are many different types of hotel room rates and through the article, Hotel Link has summarized the room rates available on the market which hoteliers can refer to and apply to your hotel sales strategy.
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