Sloppy rate setup creates more margin leaks than you think. And unlike a leaky faucet, this one doesn’t just drip – it slowly floods your profitability while nobody’s looking.

NB: This is an article from Topline Revenue, one of our Expert Partners

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The reality is most hotels (branded or independent) are running with way more rate plans than they need, a tangle of legacy codes, and discounts that no one can quite remember creating. Guests get confused, staff get frustrated, and the hotel’s strategy quietly gets sabotaged by its own setup.

The fix isn’t a new PMS or fancy RMS. The fix is a rate plan audit – tightening up what you already have, cleaning out the junk, and aligning your rates to your actual strategy. Here’s how to do it.

Why Your Rate Plan Setup Can Make or Break Your Strategy

A rate plan isn’t just a “price.” It’s the building block of how you distribute, fence, and position your rooms. If those blocks are unstable, the whole strategy falls over.

Here’s why a messy rate setup is dangerous:

  • Margin leaks: Outdated discounts or duplicate promos undercut your own BAR. Even a stray 10% leak across channels adds up to thousands in lost profit.
  • Parity problems: When an OTA or wholesaler ends up cheaper than your direct site because of an unchecked rate, you lose both the guest and the margin.
  • Cannibalization: Multiple overlapping promos aimed at the same segment just make guests cherry-pick the cheapest one.
  • Customer confusion: A booking engine with 15 rate options doesn’t look like “value.” It looks like homework. Guests will either abandon or default to the cheapest option.
  • Operational headaches: If your front desk has to keep a cheat sheet just to explain rates, you’ve already lost.

A strong rate structure isn’t about having dozens of options. It’s about having the right few, clearly defined and properly fenced.

Red Flags That Your Rate Plans Need an Audit

If any of these sound familiar, it’s time to take a closer look:

Too many active rates

Your CRS or PMS looks like a rate plan graveyard – dozens of codes, half of which no one uses or remembers.

Expired promos still live

“Grand Opening 2019” or “Spring Break Special” from two years ago still sitting active in your system.

Read the full article at Topline