glossary: P

Penetration Pricing is used most frequently in newer hotels with the process of offering initially low rates to grow occupancy and then raising room rates as availability dwindles. It is a strategy to set prices among the most affordable in the market. As its name suggests, it is used for new hotels and properties to … Continued

Preferred Rates are a hotel corporate rates usually negotiated beforehand between the hotel or hotel chain and a business company that are discounted based on volume, Once the company’s special rate has been negotiated, the company rates called preferred rate, other terms referring to preferred rates are: contracted negotiated, multi-level, tiered and secured rates depending … Continued

Price fencing is the revenue management practice of setting up rules and restrictions such as advance booking cut-offs or non-refundable payments that allow customers to segment themselves into appropriate rate categories based on their needs, behavior, or willingness to pay for a products and services at a specific price, the purpose is to prohibit customers … Continued

Price Elasticity is the positive or negative correlation between how a change in price affects the demand. The higher the number, the more a price change reduces demand to measures the responsiveness of demand for a product or service to changes in its price. The lower the number, the more a price change increases demand. … Continued

Price Positioning is a determination of where a hotel’s prices stand in comparison agonist the hotel comp set. Price positioning can be used to evaluate daily room rates, holiday rate promotions, spa and food and beverage prices, and more. Some of the most common strategies for price positioning include penetration pricing, skimming pricing, equal pricing, … Continued