ROOM TARIFF

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Room Tariff
• Room rate, which is the daily rate charged for the usage of a
hotel room and services, is among a traveler's basic criteria for
choosing a particular hotel for stay. The basis for charging room
rate differs from hotel to hotel. Hotels display their room rent on
tariff cards, which provide information about the room rate for
different types of rooms available in the hotel.
• The rate of a hotel room is decided by several factors, which are:
• Cost
• Level of Services
• Competition
• Target Market
• Location
• The hotel may choose to charge room rent on following basis:
• Fixed Check-in/Check-out time
• 24 Hours basis
• Night basis

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Room Rate Designation
• A hotel generally designates a standard rate for each category of
rooms offered to guests. Apart from the standard rates, hotels
also offer discounted rates to attract additional business from
multiple market segments. Hotels may have various room rate
designations as:
• Rack Rate
• Corporate Rate
• Seasonal Rate
• Advance Purchase Rate
• Week day/Week-end Rate
• Day/Half day Rate
• Group Rate
• Tour group Wholesale Rate
• Travel Agent Rate
• Volume Guarantee Rate
• Airline / Crew Rate
• Government Rate
• Educational Rate
• Membership Rate
• Introductory Rate
• Complimentary Rate
• Crib Rate
• Package Rate

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• Rack Rate: The standard rate of a particular type of room
before any discount is called rack rate.
• Corporate Rate: This is a promotional rate to attract the
corporate market segment.
• Seasonal Rate: Destinations like hill stations, beaches, etc.
receive heavy tourist traffi c during particular period(s) of the
year; the rest of the year is a lean period in terms of tourism.
During peak season, hotels do not offer any discount; rather they
may charge a higher room rate, known as the seasonal rate.
• Advance Purchase Rate: Though popular in the airlines
industry, the advance purchase rate is a relatively new concept
in the hospitality industry. It entails heavy discounts on room
rates when room bookings are done in advance.

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• Week day/Week-end Rate : Hotels analyze their demand levels
over a period of time and fix a higher rate during high demand
periods and a lower room rate during low demand periods.
• Day/Half day Rate: The day rate, charged from guests not
staying overnight at a hotel, is lower than the rack rate.
• Group Rate: As a large group (more than 15 persons)
provides bulk business to a hotel, hotels offer discounted rates to
groups. The group rate depends upon the number of persons in the
group and the frequency of their visits.
• Tour group/ Wholesale Rate: These are heavily discounted
rates for wholesalers who operate a series of tours for groups
arriving and departing together
• Travel Agent Rate: Travel agents sell travel products like
hotel rooms, airlines bookings, etc. on a commission basis to the
end users (guests). They provide a substantial volume of business
to hotels, hence hotels offer them special discounts and
commissions.

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• Volume Guarantee Rate: Hotels may offer a special rate (lower than
the rack rate) in order to attract high volume of business from special
market segments.

• Airline / Crew Rate: It is a special discounted rate for the crew of

one or more airlines that offer certain volume of business throughout
the year on a consistent and continuous basis.

• Government Rate: When government officials travel for official work,

they are given a travel allowance to cover their hotel, meals, and
other out-of-pocket expenses. Based on their designation, this amount
is fixed and given in advance.

• Educational Rate: Educational rates are special rates offered by

hotels to students and educationists who have a limited travel budget.

• Membership Rate: Membership rates are offered to guests who are

members of influential organizations that provide volumes of business
to hotels.
• Introductory Rate: The introductory rate is offered by a hotel on the
opening of a new property in town. It is a part of a new hotel’s
marketing strategy to make inroads into the existing market by
offering a price lower than what is offered by competitors with the
same standards.

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• Complimentary Rate: When a hotel does not charge the room
rent from a guest, it is known as complimentary rate.
• Crib Rate: This is the rate charged for children above five years
and below of age 12 years who are accompanying their parents.
• Package Rate : A package rate is quoted for a bouquet of
products or services. The rate is generally lower that the sum total
of the prices of individual products or services offered in the
bouquet. Hotels may offer the following packages:
• Meeting package : A complete meeting package includes the residential
arrangement of the delegates, meeting room, food and beverage requirements
(meals, tea/coffee, snacks), along with transportation facility, audio visual
equipment like projectors, etc. to the meeting delegates.
• Meal package: A meal package is the combination of room rent and meals,
which may be all meals or a combination of breakfast and lunch/dinner. The
hotel may offer meal packages based on the requirement of guests and the
suitability of the hotel’s operations. The various meal plans offered by hotels are
discussed at length in the subsequent section.
• Marriage package : A marriage package includes all the necessary
arrangements for marriage, like mandap, priest, party hall/lawn,
accommodation for the marriage party, arrangement of reception buffet, and
even a complimentary room/suite for the newly-wedded couple.
• Holiday package: A holiday package may include transportation,
accommodation, meals, guide, and sightseeing at the destination. Generally,
this package includes non-hotel products from other service providers like
airlines.

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Meal Plans
The room tariff of a hotel may be based on the choice meal plans
offered to guests. Depending on the needs of their target audience,
hotels offer a variety of meal plans ,they are:

• European Plan European plan (EP): consists of room rate only and
the meals are charged separately as per actual.
• Continental Plan Continental plan (CP): consists of room rate and
continental breakfast.
• American Plan American plan (AP) : It is also known as en-
pension (full board). The tariff includes room rent and all meals (i.e.,
breakfast, lunch, and dinner).
• Modifi ed American Plan Modifi ed American plan (MAP): This
is also known demipension (half board). The tariff consists of room
rent, breakfast, and one major meal (either lunch or dinner).
• Bed & Breakfast (B&B) or Bermuda Plan: Bed and breakfast plan
(B&B) or Bermuda plan consists of room rent and American breakfast.

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Copyright © 2009 OXFORD Higher Education
Room Tariff Card
• Room tariff cards are published lists of the different tariffs offered by
hotels for the use of the travel trade (travel agencies, tour operators),
companies, and individual guests called FITs (free individual
travellers). The document includes prices of rooms, meal plans, taxes,
applicable policies, etc.

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