Understand your audience. Know your product well. Develop a rate plan. Deliver it at the right time and via the right platform. There you have it. A SUCCESSFUL RATE PLAN!
NB: This is an article from Staah
Easier said than done though.
Rate plans are one of the most complex aspects of revenue management. But, once you understand and get them right, the returns are significant.
Let’s Start Off With Understanding What Is a Rate Plan?
Rate plans are the different rates you see on a hotel website when you search for a set of dates. Guest choose to stay – or not stay – with you based on the rate plan they see. Hence, getting it right is important to increase your revenue.
What Should You Consider When Building a Rate Plan?
- Your audience. Creating a three-day family package for weekdays when you’re a city or airport property catering to business travelers is a clear mismatch. To create a good rate plan, you need to understand your audience. What type of traveler are they? What do they like? How long do they stay? Which geographic location are they from?
Look into your channel manager and property management system insights for details. Your website analytics and social channels are also a good way to understand your guest better.
- Length of stay. How long your guests stay for should be built into the rates and packages you push out.
- If you’re an airport property, give your users the option of staying with you for the day via a suitable rate plan. This can be easily set up using the Day Use feature in your STAAH booking engine.
- Lead time. How far out from date of stay do your guests typically book? Incentivise them to book early with the right rate plans and discounts.
Now, Let’s Look at Some Types of Rate Plans Your Property Should Be Creating
- Best Available Rate (BAR). This is the rate that serves as your property’s foundation and will go into supporting all your revenue decision. It is typically understood to be room only. They are also non-flexible, non-refundable and at least 10% cheaper than your rack rate. This is a great incentive to push users to book direct as well. Use features such as STAAH’s WatchMyRate to show your BAR to your users, mapped against OTAs. It’s a great way to get them booking via your website.
- Advance Purchases. This is linked to increasing your lead time. Incentivise your guests to book earlier by setting up Advance Purchase, which is typically a percentage off the BAR rate. This rate plan is set as non-refundable and non-cancellable. It allows guests to enjoy a discount while the property benefits from guaranteed base business to later yield rates up.
- Bed & Breakfast and Other Packages. Bed and Breakfast rates are one step up from Room Only rates. They are the first opportunity to upsell your guests. Another great way to upsell is by setting up promotional packages around upcoming special days, events and themes. Eg: Romance Package, Christmas Special, etc. Learn how you can set up promo codes on your STAAH booking engine so you can promote and monitor the success of your promotions. You can even push out your promotions on your STAAH booking engine via the Daily Promotion Widget.
- Multi-stays. Guests who stay longer are more cost effective – that’s a no-brainer. Set up your rate plans to push guests to stay longer and pay a higher rate. Eg. Stay for four nights, pay for three.
- Last Minute Deals. Set discounts and create special offers to sell same day or short lead bookings. STAAH booking engine’s Last Minute Rate feature allows you to modify rate plans to apply last minute deals (also known as special rates or specials). An intuitive way to make your inventory work harder.
