A rate plan in hospitality is a set of prices that a property creates for a certain room type. Various rate plans can be set up according to different strategies. Some of the common ones are based on such factors as
- package (nonrefundable, cancelation allowed with complete/partial refund, breakfast included, etc.);
- booking channel (different OTAs, direct booking, wholesalers, etc.);
- guest category (walk-ins, seniors, government employees, corporate travelers, etc.); and
- season (vacation season, low season, sports season, etc.).
Typically, creating a rate plan involves setting up the best available rate (BAR) and then adding multiple pricing levels, either discounting or increasing the BAR. For example,
- the Length of Stay (LOS) promotion might include a discount off BAR for booking more than a specified number of nights;
- the B&B package might involve increasing BAR in case breakfast is added to the package;
- the Advance Booking rate plan might include a discount granted for early reservations (often nonrefundable and noncancelable); and so on.