Rate Management Terms to Know
 
Rate Management Terms to Know
03 JUNE 2019 7:18 AM

This roundup of important hotel industry terms focuses on topics relating to rate management, such as data science, price elasticity and wholesalers.

Brand.com
A broad term used to refer to hotel companies’ (or other brands’) first-party websites, which are used as a primary portal for consumers to book directly with said company.

Contract rooms
Contract rooms are occupied at rates stipulated by contracts—such as for airline crews and permanent guests. Room allotments that do not require guaranteed use or payment should not be classified as contract. Rooms sold under such allotments should be classified as transient.

Data science
A way to allow hotels to predict consumer behavior by using technology such as artificial intelligence. Some global hotel chains employ data scientists and analysts to develop and deploy dynamic pricing models based off of data from competitors.

Direct booking
The practice of guests booking (whether online, via phone reservations or other channels) directly with a hotel company or property and not a third-party such as a global distribution system or an online travel agency.

Distribution channel
The different methods with which guests can book stays at a hotel. This broadly includes channels such as GDS and OTA, as well as first-party channels such as phone reservations and online booking at Brand.com.

Dynamic pricing
A strategy of pricing goods or services based on changing market conditions.

FIT
Free and independent travel, or business that is not part of a package or group.

Global distribution system
Centralized reservation systems utilized by several large companies and travel agents to book multiple travel-related services.

Group rooms
Rooms sold simultaneously in blocks of a minimum of 10 rooms, usually from group tours, domestic and international groups, associations, conventions and corporate groups.

Online travel agency
An internet-based hotel and travel reservations system. Hotels typically provide inventory to OTAs, which sell the rooms in exchange for a commission.

Price elasticity
A change in the quantity of a product demanded or purchased by consumers in relation to the change in price.

Rate parity
When a travel supplier, such as a hotel, maintains the same price across all its various distribution channels.

Revenue management
The use of data and analytics to best price a product on the best channel to generate maximum revenue.

Room revenue
Total room revenue generated from the sale or rental of rooms.

Voice search
Technology that uses speech recognition to allow guests to search by speaking keywords or terms.

Wholesalers
Companies that purchase hotel rooms and then sell them to OTAs or travel agents.

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