Hotel rates types: discover the best pricing for your hotel
25 May 2023
Countless times you have probably wondered how to correctly set hotel rates for your accommodation. Just as countless are the tools that allow you to monitor the performance and therefore suggest the best selling price for your rooms or apartments, on the basis of a careful analysis of specific parameters related to the most different features of the market.
Without getting too technical, however, we can certainly say that offering your customers a wide range of possibilities, a wide selection of rates, can without any doubt allow your guest to choose the rate plan that suits them best and thus increase the bookings.
The first term refers to a minimum rate, a base price below which we will never fall, even in low season, as selling our rooms at a lower price could represent a mere economic loss. The bottom rate is then determined by internal dynamics, on the basis of the costs to be covered and the profit margin.
On the other hand, the Rack Rate is set by the relevant authorities and represents the ceiling beyond which we cannot push the sale price of our rooms without incurring sanctions that would in any case force us to reset our sale price.
Once the minimum and the maximum limits have been identified, we can then decide how to set hotel rates and what to offer our customers.
- B2C – Business to Customer
The end consumer is the one who searches for rates and completes the connection process for himself to any of the direct booking sites (Booking Engine) or through the OTAs (Booking.com, Airbnb, and the other sites for renting vacation rental homes and hotels)
- B2B – Business to Business
In this case, there is a third person between the accommodation and the end consumer who, like a bridge, provides a connection, as an intermediary in the booking process. Classic examples of intermediaries are travel agencies or tour operators, with whom specific contracts are concluded for the sale of the rates.
The rate that reaches the end consumer is often increased by the tour operators by a value, called a mark-up, which corresponds to their percentage of profit.
- Room Only
The cost of the room only includes the overnight stay in the chosen room/apartment.
The breakfast is included.
- HB – Half board
It is the rate that in addition to the breakfast, also includes another meal choosing between lunch and dinner.
- FB – Full Board
The rate including breakfast and both main meals.
- All Inclusive
This rate is usually found in tourist resorts where, in addition to the main meals and the breakfast, drinks and snacks are included.
- Not Ref – Non Refundable
These are the hotel rates that cost less than the standard rate (usually about 10 per cent off) exactly because they represent rates that cannot be modified nor cancelled. Reservations of NR rates, in fact, are collected immediately and no refund is paid to the end consumer in case of cancellation.
The exact opposite of the type of rate just described: flexible hotel rates, as the name suggests, guarantee the guest freedom to change and to cancel the reservation, according to cancellation policies established by the accommodation, which are far less restrictive than those related to the Standard rate.
A package deal is so-called because in the selling price are included specific services that make the offer in question special, usually enabling the guest to obtain a complete experience at a very advantageous rate, therefore cheaper than the cost that the standard rate would be with the addition of single extras, otherwise the guest can also take advantage of services that are not available during other periods of the year.
We can therefore define package prices as special hotel rates, as they can include the features we have mentioned in the previous paragraphs – Not Refundable, breakfast included, HB – together with other ancillary services that complement and enhance the customer’s experience – a sightseeing tour, an aperitif with a SPA path, etc.
To top it off, a dashboard of advanced statistics to monitor your sales strategy and increase your revenue! (see the article about the RevPAR).
In addition, Octorate allows you to set up a tailor-made configuration so that you can offer your guests a wide range of opportunities!
With the Rate Plans function, you can set countless rates according to their degree of flexibility and the type of treatment, create package deals with included extras with which you can use useful upselling e cross-selling strategies and a price correction that will automatically vary the sale cost of the type of room associated.
Sell your hotel rates without commission charges thanks to the Booking Engine, your fully customizable booking engine compatible with any type of website.
Would you like to find out more? Book a free demo!
📉 What does the Bottom Rate show in Hotel pricing?
🎢 What does the Rack Rate show in hotel pricing?
❓What are the main hotel rates?
- Room Only -When the cost of the room only includes the overnight stay
- B&B – When the breakfast is included.
- HB – Half board – When, in addition to breakfast, one of the meals between lunch and dinner is also included.
- FB – Full Board -It includes breakfast and both main meals.
- All Inclusive – A rate available in tourist resorts where, in addition to the main meals and breakfast, drinks and snacks are included.
- Non Refundable – Rates that cost less than standard ones, because they represent the rates that cannot be modified nor cancelled.
- FLEX – These rates guarantee the guest the freedom to change and to cancel the reservation, according to the cancellation policies established by the accommodation, which are far less restrictive than those for the Standard rate.
🆒 What are the package deals and what are they for?
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