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. "
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. "