Targeted, audience-focused room rates that drive bookings are central to the success of a hotel. But how do you pinpoint the right rate for a specific scenario? Technology can handle the data crunching side of this, enabling hotels to benefit from more competitive visibility across the marketplace.
Hoteliers and their revenue management teams are constantly grappling with room rates. What a future guest is willing to pay for a hotel room depends on the room type, season, location and more. Pitching it just right sees occupancy levels soar to the +70% level that hotels strive for. And when this is achieved, hotels enjoy improved budget management and healthier forecasting.
But the reality of developing and disseminating the right rates isn’t easy.
This is where having multiple rate plans comes in. With rates that you can use for different audiences – and the ability to broadcast them quickly in response to market trends – gives your hotel an edge when it comes to securing more bookings.
So what are the different rates your hotel should explore in today’s travel and hospitality climate, and how can technology help?
Flexible and semi-flexible rates
These rates should be targeted at customers who prioritise peace of mind, and not the lowest rate. The flexible rate should be higher than the best available rate (BAR), because guests benefit from a favourable cancellation policy.
Non-refundable rates
Designed with budget-conscious customers in mind, these rates should be promoted to individuals who are willing to accept a no-refund policy for a lower rate.
Early booking
A rate for customers who want to closely manage their budgets, this is for people who are willing to book a hotel room in advance. It meets the needs of a specific audience type who is happy to work with a longer lead time when making travel plans.
Group and corporate rates
Many hotels are diversifying to meet the needs of groups and corporate clients, as this is a growing and potentially very lucrative revenue stream. Global spending on business travel is expected to reach $1.5 trillion for the first time in 2024. Having competitive rates to attract these types of customers is a solid business move for hotels, and responds to a current market trend.
Negotiated rates
These rates – are fixed to incentivise companies and organisations to regularly use your hotel for its business stays. Negotiated rates reflect the business need for hotels to secure and maintain strong partnerships with key commercial partners.
Evergreen rates and promotional rates
There are rates that are useful to a hotel throughout the year – unaffected by the season or target audience. Many of the rates mentioned above are evergreen rates. Promotional rates are the opposite of evergreen rates, and are helpful for hotels to manage times of lower occupancy. For example, having a promotional rate that offers two nights for the price of one can be useful during the low season. Other promotional rates could incorporate dining or spa packages.
How can technology help hoteliers with room rates?
Having a suite of rates – ready to roll out – is the first key step for hotels. Once you have defined what these rates mean, including booking conditions, minimum stay durations, room types, dining options, cancellation policies and more – you can use them as and when needed. But getting rates out there to prospective customers, in real-time, requires a little technological prowess.
SIHOT.PMS has systems in place for this to happen. Our SIHOT.YIELD EXPRESS, SIHOT.RATES+ and SIHOT.SALES modules all collect relevant data, which is fed through our partner Revenue Management Systems such as Duetto and IDeaS. This creates a technological ecosystem that collates and analyses data to optimise the rate within the RMS. This is done for all the different rate structures you have pre-defined. An integrated channel manager such as Siteminder or D-Edge then sends these rates to multiple third party partners, giving them live rates and availability on their websites.
This is a slick, data-driven and business-focused way of delivering relevant and competitive hotel room rates to a variety of audiences.
Contact us to find out more about how the SIHOT hotel management system and its range of modules could help drive your hotel rate strategy.