Rate plan

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

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.

Devising rate plans is a part of hotel revenue management activities that aims at maximizing occupancy and generating revenue.

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