What is the difference between rate and price in hotel management? What are the strategies to define and apply rates and prices quickly and automatically?
In this blogpost we will talk about a topic that too often leaves some doubts, Edoardo and Marco will reflect together on what are the strategies of how to create rates and prices for your hotel.
As told in an article from our blog some time ago, we will try to understand what the best strategies can be to set prices in the “right” way.
First of all, we define the price as the economic amount for which a certain accommodation is sold, while a rate is the composition of a name, booking conditions and basic treatment.
A classic example of a rate can be a basic rate such as “Refundable overnight only“, where only overnight accommodation is offered and as a booking condition free cancellation is offered if made within 7 days of the arrival date.
The importance of using derived rates
When it comes to tariffs, we cannot fail to explore the concept of derived tariffs.
The definition of a tariff always starts from a mother tariff. In our case, a mother rate can be the “Room only” rate that we sell at the price of € 100 per night. From this mother rate we can create a derived rate that inherits the same restrictions as the base rate, but which perhaps offers a different treatment or “Bed and Breakfast” and to which we apply a percentage supplement of 10%.
If desired, we can also create the “Half board” derivative rate to which we apply a fixed supplement of € 35 per guest.
The great simplification lies in the fact that if you wanted to change the mother-only RATE and bring it from € 100 to € 120 (per night), the other derived rates would automatically update without the need to touch anything manually.
To learn more and deepen the topic, we refer you to reading the article dedicated to the derived rates.
The price is right? Beware of belly choices!
When setting the classic seasonal price lists, we tend to make choices that can be impulsive, without taking into account a cost analysis.
The application of a discount in the high season, the raising of a revenue index, may have given the illusion of earning more, when in reality it was not so.
Precisely for this reason it is important to use a software tool that is “all in one”, that is, able to offer you visibility on the data and the ability to synchronize all the actions that are carried out in the hotel by the various staff members, so that you can analyze all the end of the season. the choices made through an in-depth revenue analysis.