Hotel Revenue Glossary · Pricing

Promotional Rate

A temporary discounted rate offered to stimulate demand during specific periods, channels, or for targeted guest segments. Promotional rates are time-limited and typically include conditions like advance purchase, non-refundable terms, or minimum stay requirements.

Why it matters: Promotional rates are a tactical tool for filling need periods without permanently lowering BAR. The key is ensuring the promotion is fenced properly so it attracts incremental demand rather than cannibalizing guests who would have booked at the regular rate.

Worked example: An advance-purchase, non-refundable promotion takes A$30 off a A$199 BAR, selling at A$169. Over one week it produces 84 bookings. The same week last year produced 61 without any promotion, so treat roughly 23 as incremental and 61 as bookings you would have had anyway. The promotion earned 23 × A$169 = A$3,887 and gave away 61 × A$30 = A$1,830. Net A$2,057 — worth running, and worth fencing harder next time.

Common mistake: Judging a promotion by how many rooms it sold. Volume proves the rate was attractive, not that the demand was new. The number that matters is the gap between this period's pickup and the same period without the offer — and if the promotion is unfenced, much of that volume is your own BAR business at a discount.

All glossary terms BAR (Best Available Rate) Rate Fence Need Period