FIRST CITY PROVIDENTIAL COLLEGE

RATE
DESIGNATIONS

Anne Michelle J.
 1. Length of Guest Stay
• What is the meaning / definition of 
Length of Stay In the hospitality industry?
• LOS stands for Length of Stay. Figure derived by
dividing the number of room nights by the
number of bookings.
• When it comes to revenue management, LOS is
an important criteria. It can help enormously
with the organising and optimisation of 
occupancy within a hotel
 Different Types of LOS
1. Average Length Of Stay (ALOS)
• This is used to estimate the relative values of
various segments and to keep track of hotel
 performance in attracting and keeping guests in
house.
• Some hotels have certain booking policies in
place.
• These can be used to manipulate booking factors
when seeking to fill as many rooms as possible.
2. Minimum Length Of Stay (MinLOS)
• . MinLOS is implemented when a hotel is
facing a high demand period, following a
lower one (a hectic time after a quiet time, in
other words!).
• A MinLos policy helps regulate reservations,
meaning that short-stayers and last-minute
one night stays are avoided. Consequently this
can improve the occupancy ratios on the
following days where there is perhaps low 
demand.
 CLOSED ARRIVAL
• This policy is intended/used when turning
down new arrivals on a day of expected high-
demand, with only guests from previous night
stays being allowed to get through.
 Maximum Length Of Stay (MaxLOS).
• MaxLos is one of the strategies in 
Revenue Management that limits the number of
nights a guest or group can stay when arriving on a
certain date.
• This control is used when the hotel manager
anticipates selling out rooms at higher rates.
• Using MaxLos, a hotel can limit the number of rooms
sold at large discounts during the high rate time
period by limiting the (discounted) multi-night stays
extending into that time period.
• To accommodate guests who would like to 
stay at the hotel longer than the maximum
length, it is possible to charge two rates: 1) a 
discount rate for nights up to the maximum,
and 2) a rack rate for subsequent nights.
• Keep in mind and be sure that the hotel will
have high demand during that period;
otherwise, you could decrease RevPAR (
Revenue Per Available Room) instead of
improving it!

Formula Average Length of stay (ALOS) = Total

occupied room nights / Total bookings
Calculation Average Length of stay (ALOS) =
111 / 37 = 3
 2. Facilities offered
• Hotel facilities are services, buildings ,
equipment and everything else that is created
to serve a particular function to make your
stay in the hotel perfect and corresponding to
your needs. Think about the situation.
 Hotel Facilities
• Spa
• Semi open & outdoor restaurant
• Poolside bar
• Car parking
• Swimming pool/ Jacuzzi
• Public computer
• Disable rooms & Interconnecting rooms
• 24 Hour security
• Outside catering service
• 100 Seating capacity restaurant
• 150 Capacity outdoor terrace
• 45 Seating conference room
• 35 Seating private air-conditioning dining room
• Water purification system
• Sunset boat trip
• Gift shop
 Guest Services
• Guest Service
• 24-Hour room service
• Free wireless internet access
• Complimentary use of hotel bicycle
• Laundry service
• Tour & excursions
• 24 Hour concierge
• Meeting facilities
• E-Bike & horse cart rental
• Airport transfers
• Babysitting on request
• 24-Hour doctor on call
 3.Location
• “Location” is an important reason for
selecting a hotel, especially for economy and
mid–scale guests. But the results of this study
found that it is the guest experience that has
the most influence on hotel selection. ...
“Price” was the next most popular reason why
guests choose a hotel.F
 4. Number of rooms
• ogical and consistent assignment of
room numbers is important for efficient
everyday building usage, and to allow
emergency personnel to quickly and easily
find their way to any area of a building. ...
Buildings that have more than nine floors will
have four digits assigned to rooms beyond the
ninth floor.
 5. Ownership
1. Franchise Model
• A franchise hotel operation has clear advantages and
disadvantages. While the hotel will benefit from
recognition of the brand name by consumers, a proven
business model and national marketing, the hotel’s owner
is dependent on that brand name for its business. If the
brand loses popularity with consumers, the owner’s
business suffers as well. In addition, since a franchise is
generally limited to the territory it can market in and
cannot franchise itself, its growth options are limited to
purchasing additional franchises.
 Privately Owned and Operated

• This type of hotel ownership gives an owner

the most freedom, but also the biggest risk.
The hotel owner is free to make all decisions
on staff, operational structure and growth, but
does not have the benefit of a brand behind
him. All marketing research and efforts must
be built from the ground up.
 Leased

• Leased hotels are also privately owned, but

the physical hotel building belongs to
someone else. These types of arrangements
are generally on long-term leases. The lessor
will stipulate a minimum rent for the
premises, and may also include a sliding scale
based on total revenue for ongoing rent.
 Managed
• While the trend for new hotels is to open as
franchises, existing hotels quite frequently go the
managed route. This is where an existing
privately owned hotel partners with a recognized
brand name or smaller, more experienced hotel.
The hotel continues to be privately owned, but
the managing hotel takes over the day-to-day
operations of the business and quite frequently
lends its brand name as well. The managing hotel
charges royalties based on total revenues.
 6. Pricing Plans
• 1. Pricing Strategy Based on Forecasting
The single most important pricing strategy for
hotels to master is the use of forecasting to set
their prices based on anticipated demand.
Essentially, this should mean that the hotel room
rate being charged will depend on how high
demand is. For instance, times of high demand
may lead to higher room rates, in order to
maximise revenue.
2. Rate Parity Strategy
• In simple terms, a rate parity strategy involves maintaining
consistent rates for the same product, across all 
online distribution channels. The key benefit of this is that it
provides transparency for consumers, while it is also often a
prerequisite of advertising rooms through online travel agents, such
as Expedia and Booking.com.
3. Price Per Segment
• One of the most commonly used pricing strategies for those in the 
hotel industry is price per segment, and this is where you offer the
same product at different prices to different types of customers.
• While “open market” prices should be subject to a rate parity
strategy, prices for corporate segments could be lower, especially if
they commit to a certain number of rooms, or a certain number of
meals. Another option would be to sell multiple rooms to travel
agents for a lower rate, so the travel agent can include the rooms in
packages.
4. Discount Codes to Stimulate Direct Bookings
• Although a price parity strategy may prohibit some of
the pricing incentives that can stimulate direct bookings,
one highly effective strategy involves the use of discount
codes to encourage future direct bookings.

5. Offer a Package
• Another solid option for those in hotel management
 attempting to maximise revenue is to create packages,
allowing customers to pay for more than just a room.
Additional items, services or products that may feature
in a package deal include meals, bicycles, access to golf
courses and equipment, and so on.
6. Length of Stay Strategy (LOS)
• As the name implies, a length of stay strategy is based
around adjusting pricing based on the length of the stay. In
some instances, such as when demand outweighs supply, it
can be beneficial to implement a rule where guests are
‘obligated’ to stay a minimum number of days. In such
cases, lower rates may not always be necessary.
7. Cancellation Policy
• The cancellation policy of a hotel can also factor into a
pricing strategy and help to increase revenue. For instance,
one option is to charge a lower rate on the condition that a
guest cannot receive a refund in the event that they cancel
the room, while higher rates are charged when guests have
greater flexibility with cancellations.
8. Upselling
• The basic principle of upselling involves encouraging
customers to spend more on their existing purchase
or booking, and it is a vital component of any
effective hotel revenue management strategy
within the hotel industry.
9. Cross Selling
• Cross selling is a similar concept to upselling, but
rather than encouraging customers to spend more
on an existing purchase, it involves encouraging
customers to make additional purchases on top of
the one(s) already made.
10. Excellent Review Management
• Finally, better reviews are likely to result in
improved conversion rates. Meanwhile, guests
are also usually willing to spend more on
rooms in hotels with positive reviews, because
they can have greater confidence in their
choice. Indeed, when two hotels offer a
similar product, the one with superior reviews
will often be chosen by customers.
 Types of Clientele
1. Rack Rate 7. Advance Purchase
2. Corporate Rate Rate
3. Volume Account 8. Half Day Rates
Rates 9. Industry Rates
4. Government Rates 10.Package Rates
5. Seasonal Rates 11.Group Rates
6. Weekday/Weekend 12.Per Person Rate
Rates