How do you design a successful rate plan for your hotel? Why are some rate plans more successful than others?
When you create rate plans, try and tap into your inner hotel shopper psyche. Is your customer planning to visit your hotel for business, or pleasure? What are their expectations when they make their initial date search? When they’re visiting your hotel website, what do the images they see on the homepage represent? What do your images and copy in the Bedrooms, Food and Beverage, Golf and Spa pages represent?
Every rate plan has purpose. However, not every rate plan has a valid purpose. Is the rate plan there to, for example, keep your chef happy that you’re promoting the restaurant, or is there a real financial value for the hotel in having it there?
Below are 4 examples of the most profitable rate plans hotels typically offer, along with a breakdown of why they’re valuable and how to use them.
Room Only: Book Direct to Find the Best Available Rate
Offer a room only rate with a Best Rate Guarantee to your own website. In short, no matter the scenario, guarantee for guests that the best available rate for your hotel will always be when they book direct. Here’s a study from Cornell that gets into the specifics of how customers prefer to see BAR displayed on your site.
A word of warning: offering this rate plan to any third parties or other openly available sources opens up the opportunity for them to margin test your rate to secure a booking through their own website.
Margin testing is when an OTA tests the margins of the rate you are providing them, usually by taking 2% – 4% off the rate and selling the rate cheaper online. The hotel will still receive the correct rate for the booking, but the OTA will have taken the hit in commission by 2% – 4%. This percentage won’t concern them, as in most cases they are still making a further 12% and in some cases 15%. You can eliminate this risk by only offering “room only” rate plans directly on your official hotel website.