How to effectively manage Revenue

Best Available Rate vs Open Pricing: New Options

Today, revenue management has assumed an overriding importance in the hotel industry. Smarter room pricing helps you manage inventory efficiently, allocate staff effectively and maximize your profits. For hoteliers, the ability to accurately forecast future demand for rooms, and then to adjust prices in alignment with those forecasts, have proven to be fundamental to setting optimal room prices. Today, the Best Available Rate (BAR) strategy has become the most widely-used pricing mechanism in the hotel industry. But is it necessarily the best?

Shifting the BAR: Are You Leaving Money on the Table?

Best Available Rate (BAR) is a fixed-tier revenue management approach that sets one main public rate, and rates for all other sales channels and segments become a derivative of that. For example, if BAR is $100, the price for some distribution partners might be 10% less, and the online travel agents (OTA) rate 30% less. On certain peak-season dates, BAR hoteliers will cut offers to distribution partners and OTAs entirely, in order to maximize their own profits. This approach is easy for hoteliers to manage. But it reduces the number of people who can find the available rooms online. Furthermore, many customers would be willing to pay more for precisely the right room on the right date, but are discouraged by minimum-stay requirements. What’s needed is a pricing strategy that combines the supply-and-demand responsiveness of BAR with a much more flexible, targeted and open approach.

Clever combination of Pricing and Online Reputation

Unlocking Hidden Potential: Open Pricing

Customer demand is dynamic, so your revenue management must be dynamic too. A new approach called Open Pricing makes it possible to price all room types, channels and dates independently of each other to maximise revenue. All rooms are available on all channels. Instead of rates all moving in lockstep with best-available-rate pricing, hotels can establish systems that price each room individually based on actual demand. Open Pricing is a versatile and scalable approach which allows you to optimise your profits, while simultaneously providing customers with the best possible room rate.

Make Open Pricing Strategies a Reality with Duetto

To provide hotels with appropriate technology for these new challenges and developments, Worldhotels recently partnered with Duetto, the leader, innovator and champion of Open Pricing and the market leader in hotel profit optimisation technology. Through this global partnership, Worldhotels is bringing new insights on pricing and demand to its hotels and enabling them to optimize bookings and make better business-mix decisions with superior, actionable data.

Patrick Bosworth, the Co-Founder and CEO of Duetto, sums up the benefits: "The pace of change in the marketplace is accelerating ever more quickly, and advanced revenue strategy solutions bring flexibility that fully optimize revenue and help manage distribution complexity. Smart operators are increasingly, and rapidly, adopting such solutions.”

Torsten Rolke, the Vice President of Hotel Distribution & Business Performances at Worldhotels agrees, suggesting that “hoteliers need to reshape revenue strategies to align sales, marketing, revenue management and operational teams, while working with the appropriate technology to make Open Pricing strategies a reality.”

To learn more about Duetto’s powerful revenue-management solutions, simply visit their website:

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