Room Rates is essential topic for front office staff for them to appropriately apply basic the type of payments required. Room Rate Designations The individual room rates within the rate structure are allocated a value based on certain characteristics The room rate designation is the term used to specify the rate threshold within the overall structure, and therefore defines what position a specific rate will take within the overall rate hierarchy The room rate designation does not specify an actual dollar value, it simply “ranks” all the rates within the rate structure Rack Rate and Corporate Rate Rack rate – the rack rate is the highest published rate a hotel can charge for a specific room. Rack rates can differ between room type, configuration, and designation Corporate rate – this designation is designed to promote the corporate market segment. Typically the corporate rate reflects a 10 to 20% discount off the rack rate. The corporate rate is widely accepted as the transient target rate for most hotels. The target rate is simply an average rate goal a hotel sets to achieve for a certain day or market segment Volume Account Rates Volume Account rates – Also called preferred rates, the volume account rate trades a further discount of the corporate rate in exchange for a guaranteed number of room nights within a specific time period. The level of this discount is contingent upon the volume. These volume accounts are usually assigned a grade based on production and hotels with predetermine the number of room nights required to achieve each grade, and assign a rate accordingly Volume Account Rates (Cont…) For example: “A” Accounts are entitled to a 20% discount off corporate rate “B” Accounts are entitled to a 15% discount off corporate rate “C” Accounts are entitled to a 10% discount off corporate rate Government Rate Government rate – Within most major cities, government agencies set predetermined rates that they will reimburse travelling employees for. This reimbursement rate is called a per diem, and for government employees, usually covers hotel, meals and other expenses. These per diems are set a year in advance and published so that all interested hotels can offer it. Seasonal Rates Seasonal rates – Resorts and other location types that see a fluctuation in demand due to the weather or the operation of a nearby attraction will vary their rates accordingly. Offering a different rate for in-season and out-season (off season) allows the hotel to alter their rate structure to compensate for this cyclical demand. A seasonal rate designation can apply to other rates as well. Weekday/Weekend Rates Weekday/Weekend rates – hotels of all location types will see fluctuating demand during certain days of the week. Traditionally, hotel location types see their weekday and weekend demand levels. Advance Purchase Rates- An advanced purchase rate offers a greater discount based on the number of days in advance it is booked. A 7, 10 or 21 day adv

1. Room Rates
FRONT OFFICE
SERVICES NCII
Presented By:
Mary Jane Baluscang-Bolańo, PhD

2. REVIEW

3. RATE CALCULATION……..
Basis in giving
RATE
is prices quoted by
other hotel

4. RATE CALCULATION……..
ANSWER:
MARKET TOLERANCE
METHOD

5. RATE CALCULATION……..
He uses the
formula:
Operating
expenses plus
reasonable ROI

6. RATE CALCULATION……..
ANSWER:
HUBBART FORMULA

7. RATE CALCULATION……..
Cost of
construction is
the basis in
setting a Rate

8. RATE CALCULATION……..
ANSWER:
COST RATE FORMULA

9. ROOM RATES
DESIGNATIONS

10. Direction: With a partner
identify if the given statement
if FACT OR BLUFF then show
to the group for one final
answer, if the group decided to
answer bluff state why.

11. ROOM RATE DESIGNATION
Rack Rack Rate is the highest rate given to a hotel room
FACT-Stand
Why…
Which group says FACT?
How about BLUFF?
BLUFF-stay seated
The correct answer is: BLUFF

12. ROOM RATE DESIGNATION
FACT-Stand
Why…
Short time rate is good for 5 hours.
Which group says FACT?
How about BLUFF?
BLUFF-stay seated
The correct answer is: BLUFF

13. ROOM RATE DESIGNATION
Seminar is an example of Package Rate?
FACT-Stand
Why…
Which group says FACT?
How about BLUFF?
BLUFF-stay seated
The correct answer is: BLUFF

14. ROOM RATE DESINATION
Volume Rate means you paid the room for 1 month?
FACT-Stand
Why…
Which group says FACT?
How about BLUFF?
BLUFF-stay seated
The correct answer is: BLUFF

15. ROOM RATE DESINATION
Weekday Rate applicable from Monday to Sunday
FACT-Stand
Why…
Which group says FACT?
How about BLUFF?
BLUFF-stay seated
The correct answer is: BLUFF

16. Room Rate Designations
 The individual room rates within the rate structure are allocated
a value based on certain characteristics
 The room rate designation is the term used to specify the rate
threshold within the overall structure, and therefore defines
what position a specific rate will take within the overall rate
hierarchy
 The room rate designation does not specify an actual dollar
value, it simply “ranks” all the rates within the rate structure

17. Rack Rate and Corporate Rate
 Rack rate – the rack rate is the highest published rate a hotel
can charge for a specific room. Rack rates can differ between
room type, configuration, and designation.
 Corporate rate – this designation is designed to promote the
corporate market segment. Typically the corporate rate reflects
a 10 to 20% discount off the rack rate. The corporate rate is
widely accepted as the transient target rate for most hotels.
The target rate is simply an average rate goal a hotel sets to
achieve for a certain day or market segment

18. Volume Account Rates
 Volume Account rates – Also called preferred rates, the
volume account rate trades a further discount of the corporate
rate in exchange for a guaranteed number of room nights within
a specific time period. The level of this discount is contingent
upon the volume. These volume accounts are usually assigned a
grade based on production and hotels with predetermine the
number of room nights required to achieve each grade, and
assign a rate accordingly

19. Volume Account Rates (Cont…)
For example:
“A” Accounts are entitled to a 20% discount off corporate rate
“B” Accounts are entitled to a 15% discount off corporate rate
“C” Accounts are entitled to a 10% discount off corporate rate

20. Government Rate
 Government rate – Within most major cities, government
agencies set predetermined rates that they will reimburse
travelling employees for. This reimbursement rate is called a
per diem, and for government employees, usually covers hotel,
meals and other expenses. These per diems are set a year in
advance and published so that all interested hotels can offer it.

21. Seasonal Rates
 Seasonal rates – Resorts and other location types that see a
fluctuation in demand due to the weather or the operation of a
nearby attraction will vary their rates accordingly. Offering a
different rate for in-season and out-season (off season) allows
the hotel to alter their rate structure to compensate for this
cyclical demand. A seasonal rate designation can apply to other
rates as well.

22. Weekday/Weekend Rates
 Weekday/Weekend rates – hotels of all location types will
see fluctuating demand during certain days of the week.
Traditionally, hotel location types see their weekday and
weekend demand levels.

23. Advance Purchase Rates
 Advance Purchase Rates- An advanced purchase rate offers a
greater discount based on the number of days in advance it is
booked. A 7, 10 or 21 day advance purchase rate will have a
corresponding lower rate.

24. Half-day Rates
 Half-day rates – Some hotels offer certain guests as an
alternative meeting room, and these rooms are often used for
just a few hours so a half-day room rate may be assigned based
on half the value of the rack rate. Half-day rates are also
commonly offered at airports.

25. Industry and Walk-in Rates
 Industry rate - Those who work in the travel industry such as
travel agents, employees from other hotels, meeting planers
etc. are often extended the courtesy of discounted rates.
Industry rates can vary from 30 to 50% off the rack rate,
depending on the location and seasonality factors.
 Walk-in rate – This may vary from night to night. A walk-in is
a guest who arrives without a reservation. With few remaining
rooms, the walk-in rate may be set fairly high, and an empty
hotel may reduce the rate significantly.

26. Package Rates
 Meal Packages – These include meals in the rate. They may
include only one meal per day (usually breakfast) or all meals
and beverages included
 Vacation Packages – These include room rates and one or
more of the following: airline tickets, transportation, tickets to
local attractions or shows etc
 Meeting Packages – This rate usually includes coffee breaks,
meals, audiovisual equipment and the cost of the meeting room
all together

27. Group Rates
 Group rates – It is difficult to catergorise these rates as a
specific designation because they can differ greatly. A group rate
is determined by many factors, but are typically lower than
transient rates because they are booked in advance and
contractually obligated.

28. Per Person Rates
 Per Person rates – charges are based on the number of
person in a room. Hotel charges a pre set amount for rooms
with single occupancy, double occupancy, triple occupancy,etc.
Every extra person who shares any of this room will have extra
charge.

29. Instruction/s:
1.Each pair are given Metacards to write
their answer.
2.You are given 21 seconds to answer.
Direction: Identify what type of room rate
designation can be applied in each given
situation.

30. 1. Sixty TVL students will be
joining the Educational tour at
Baguio City on January 22-26,2020
to visit the different tourist
destinations of the place. The Tour
organizer booked them at Venice
hotel. What room rate is
applicable?

31. 2.Cj Manzano and his coach will be joining
the National Press Conference at
Tuguegarao City. They arrived a day
earlier for them rest at Pulsar Hotel,
unfortunately the only room
available is quadruple with 2 elderly lady
occupant. If they wish to join them what
room

32. 3.Ismael will go abroad for 6
months to conduct his Thesis.
If he booked in a hotel to stays
in what room rate he can avail?

33. 4.Teacher Ella and Marie will
attend a seminar on January
20-21 (Saturday-Sunday). They
will pay for they own
lodging. What rate is
applicable for them?

34. 5.Butler Steve will have a
5 days’ vacation at
Boracay this summer.
What room rate can he
enjoy for being a butler?