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Do you use Fade Rates?

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JBloggs

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Here is one response to this FADE RATE question I found on linked in (if anyone needs to be quoted directly please let me know I am sharing excerpts only here)
You will get the gist as you read, yes this is relation to hotel rooms, but we ALSO sell rooms, albeit more than the room itself:
(sorry for goofy formatting)
"Using fade or fall back rates is a very good method to increase ADR / yield. It can be simply done by quoting only quoting the most economical roomtype in case people show price resistance. I.e. you quote a superior and deluxe room. The standard room will only be presented as a fall back option if people do not want to book.
As phone conversion is higher then online it is certainly somehting every hotel should consider."
and
"This probably happens a fair amoung on direct calls - but as with any commodity, when "price shoppers" are obvious in their approach, it could mean they already have competitive numbers or a "price point" in mind. If it's the latter, a good "talker" for the hotel may be able to ferret it out.
But I see a danger of reinforcing to hotel staff the notion that price is everything - which can lead to staff starting off with lowest price - or being reluctant to quote target prices - and sounding defensive, ready to capitulate.
In many parts of the travel industry, the buyers (and trade "partners", like Expedia) are beating the suppliers to a pulp. If we believe the global economy and particularly the travel segment is beginning to climb out of the lowest trough, it is absolutely the time to start thinking about value selling ("worth the price paid") instead of operating from a fear position.
It is surprising to learn the great number of buyers who respect and affirm a supplier (in any field) setting a fair price and sticking to it. Cultures differ and crisis business environments tend to block "sound practices" - but in the long term, being clever at pricing - and starting out with a sense the prospect may walk away - is a lousy way to sell anything. "
and
" have studiously reviewed everyone’s posts and have done further due diligence through calls to call centers, front desks, and internal reservations. I readily admit that being an independent hotel, I am afforded certain liberties not allowed by many brands, nor do I have to take into account how our actions might create a paradigm shift across the industry – it’s just me and my team.
Here are my thoughts…
As far as the electronic passive guest – a guest who we have no contact with other than through our website or through an OTA, has a shorter attention span and will be presented the rates in a menu – all rates offered at once( highest to lowest as Hilton) . I feel that if the guest calls, our interaction time is increased and we should have confidence in our reservation team to be able to present the rates in a manner which we feel best – conventionally called “fading”, but should be renamed so that the negative previous connotations are not brought over. We will present the “best” available rate; the rate that is of the best value. This will include breakfast and will be positioned (internally) as our highest rate. If there is resistance then we can engage the guest further and see if they qualify for any association discounts. If they do not we will present a rate that is less than the BAR, but will be restricted. If the guest is 48 hours outside their reservation they will be quoted an “Advance Purchase” rate, within 48 hours we will refer to it as a “last minute deal”. This pricing structure will provide rate integrity and position us favorably as we come into a better economy. "
 

JBloggs

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Question from JB-
Do you have a method for sharing rates with callers? Do you get a feel for the caller before answering with 'the lowest room rate or the highest room rate or a range of rates?'
Second question: Do you find callers are more lenient in what they pay, and after talking with you the innkeeper are willing to take YOUR recommendations on the room they will like best? ie you can sell the suite vs the full size bed?
or
Do you feel those who book online are not sticker-dickers and will just pay the rate, so those on the phone are more difficult to book and like to haggle?
 

Innkeeper To Go

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I use fade rates. That is, when a guest calls looking for a room, I first determine the number of guests and try to find out just what they're looking for.
Then I quote them 2 rates. One for the most economical room available and one for the most luxurious.
Often I'll end up selling them something in between, ie, when they ask for x,y,z, "I'll say Oh wait, here's a room that's perfect for you" and quite often that's the one they'll take.
By utilizing fade rate quoting, it is true that the innkeeper is able to hold rates easily.
Works for me.
 

gillumhouse

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I quote the pvt bath rate first because that is the room most likely wanted. I basically only have 2 rates - unless I play with them.
Example - my Easter Egg Hunt was expiring May 15 but my caller was coming June 1 and since there was a teenager going to be with and I wanted the sale of TWO rooms rather than lose it to a chain tht would have 2 beds - I offered her the Easter Egg Hunt. On arrival, she will choose an egg to see what she gets as discount. She called back the next night (1AM, she forgot the time diff) and booked. After her call the night before, I had gone in and released the block on the rooms in case she booked online (she is coming the day of my City Election - I am a glutton for punishment) for 2-nights. After I sent the confirmation letter, I sent another e-mail telling her I was running an election and DH was working it so she needed to arrive before xx and if I was not here to call my cell phone so I can come let her in.
Sometimes I will drop to my Corp rate - but not on the pvt bath, only the room that shares and only weekday because it is rare that I would have someone in the other "shared" room.
 

Innkeeper To Go

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I quote the pvt bath rate first because that is the room most likely wanted. I basically only have 2 rates - unless I play with them.
Example - my Easter Egg Hunt was expiring May 15 but my caller was coming June 1 and since there was a teenager going to be with and I wanted the sale of TWO rooms rather than lose it to a chain tht would have 2 beds - I offered her the Easter Egg Hunt. On arrival, she will choose an egg to see what she gets as discount. She called back the next night (1AM, she forgot the time diff) and booked. After her call the night before, I had gone in and released the block on the rooms in case she booked online (she is coming the day of my City Election - I am a glutton for punishment) for 2-nights. After I sent the confirmation letter, I sent another e-mail telling her I was running an election and DH was working it so she needed to arrive before xx and if I was not here to call my cell phone so I can come let her in.
Sometimes I will drop to my Corp rate - but not on the pvt bath, only the room that shares and only weekday because it is rare that I would have someone in the other "shared" room..
gillumhouse said:
Sometimes I will drop to my Corp rate - but not on the pvt bath, only the room that shares and only weekday because it is rare that I would have someone in the other "shared" room.
In a small inn with only 2 basic rates, there's really only a fade rate. The top rate and the bottom rate, so trying to feel guests out by trying those 2 ranges doesn't really work.
If you're dropping to your corporate rate, that's not fading exactly.
The whole idea of fade rating is to avoid dropping the rate. Instead you would drop to a room with a lower rate, still keeping that rack rate intact.
 

Morticia

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Question from JB-
Do you have a method for sharing rates with callers? Do you get a feel for the caller before answering with 'the lowest room rate or the highest room rate or a range of rates?'
Second question: Do you find callers are more lenient in what they pay, and after talking with you the innkeeper are willing to take YOUR recommendations on the room they will like best? ie you can sell the suite vs the full size bed?
or
Do you feel those who book online are not sticker-dickers and will just pay the rate, so those on the phone are more difficult to book and like to haggle?.
I have tried ferreting out why the guest is calling. Usually no dice they want the price and THEN they want to ask questions if they are willing to pay that price. Gomez thinks we should quote lowest avail price first and then go up if they don't like the room.
No. Guests don't seem to want to upgrade even after 30 minutes on the phone!
No again. I get online bookers who ask for a discount in the notes section of the booking.
 

egoodell

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Question from JB-
Do you have a method for sharing rates with callers? Do you get a feel for the caller before answering with 'the lowest room rate or the highest room rate or a range of rates?'
Second question: Do you find callers are more lenient in what they pay, and after talking with you the innkeeper are willing to take YOUR recommendations on the room they will like best? ie you can sell the suite vs the full size bed?
or
Do you feel those who book online are not sticker-dickers and will just pay the rate, so those on the phone are more difficult to book and like to haggle?.
We only have two rooms so don't really have the numbers to try this. But I have been selling all the time using the value for the money method. We have not discounted, just listed what comes with the room as value. Example the room comes with a bottle of sparkling wine and port and chocolate turndown, which others in the area don't offer. They will pour you a glass of wine at check in as their wine. But we offer wine and cheese at check in.
I have noticed that my guests are mostly checking all amenities offered and coming to us saying we offer more for the money.
RIki
 

Emily Spiers

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I know I've mentioned Don Fe rre ll before, but his seminar was great. He talked about never giving out the price without first telling 5 things that are included in the rate. For example: queen size bed, private bath, cable tv, wifi, and full breakfast are all included in the rate of $xxx.
The other thing that I usually do is start in the middle and then work my way up or down depending on what vibes I get from the guest. But I always talk up the room, and what's included, before I give a rate. Always.
 

JBloggs

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I know I've mentioned Don Fe rre ll before, but his seminar was great. He talked about never giving out the price without first telling 5 things that are included in the rate. For example: queen size bed, private bath, cable tv, wifi, and full breakfast are all included in the rate of $xxx.
The other thing that I usually do is start in the middle and then work my way up or down depending on what vibes I get from the guest. But I always talk up the room, and what's included, before I give a rate. Always..
Emily Spiers said:
I know I've mentioned Don Fe rre ll before, but his seminar was great. He talked about never giving out the price without first telling 5 things that are included in the rate. For example: queen size bed, private bath, cable tv, wifi, and full breakfast are all included in the rate of $xxx.
The other thing that I usually do is start in the middle and then work my way up or down depending on what vibes I get from the guest. But I always talk up the room, and what's included, before I give a rate. Always.
Excellent points.
 

seashanty

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this is very interesting. i tend to quote the highest room rate first .... second floor room, water view, queen size bed, sitting area, fireplace, full bath ... $xxx
and then work my way down.
if the caller says 'what are your rates?' i'm trying to wrap my head around what is the 'best sell' way to give rates by phone when someone asks that kind of open question.
 

Innkeeper To Go

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this is very interesting. i tend to quote the highest room rate first .... second floor room, water view, queen size bed, sitting area, fireplace, full bath ... $xxx
and then work my way down.
if the caller says 'what are your rates?' i'm trying to wrap my head around what is the 'best sell' way to give rates by phone when someone asks that kind of open question..
seashanty said:
if the caller says 'what are your rates?' i'm trying to wrap my head around what is the 'best sell' way to give rates by phone when someone asks that kind of open question.
Respond to his question with some info and more questions. Something like "We have a small, budget room that starts at XX, we have a lovely suite at XX, and we have a range of good options in between. Why don't you tell me more about what you're looking for and I'm sure we can find the right match for you."
And get them started from there. The main thing is to keep the high range in their mind even as you quote the lowest priced room, too. As you're talking, you'll be able to better sell each room's amenities/features.
 

Samster

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Question from JB-
Do you have a method for sharing rates with callers? Do you get a feel for the caller before answering with 'the lowest room rate or the highest room rate or a range of rates?'
Second question: Do you find callers are more lenient in what they pay, and after talking with you the innkeeper are willing to take YOUR recommendations on the room they will like best? ie you can sell the suite vs the full size bed?
or
Do you feel those who book online are not sticker-dickers and will just pay the rate, so those on the phone are more difficult to book and like to haggle?.
I found that people on the phone were always looking for an additional discount above what was online. Callers were often the folks that said, "I'm just looking for a nice place for $100/night" after I iterated all of our amenities. I sent them to the "economy" motels because these people would waste a lot of my time and they had their number in mind and didn't want to budge. Just my experience....
 
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