Hotel Revenue Glossary · Segmentation

Rate Code

An alphanumeric code in the PMS that identifies a specific rate plan and its associated pricing rules, restrictions, and commission structures. Each rate code links to a rate level, cancellation policy, and segment classification.

Why it matters: Rate codes are the building blocks of pricing structure in the PMS. Proper rate code management ensures that revenue is tracked by the correct segment, commissions are calculated accurately, and rate analysis reflects the true mix of business.

Worked example: A leisure package code, PKG20, was mapped to the corporate market segment when it was built. Over a quarter it carried 340 room nights at A$144 — A$48,960. True corporate was 900 nights at A$178, or A$160,200. The report blends them: 1,240 nights, A$209,160, an ADR of A$168.68. Corporate reads A$9.32 light, and the account review that follows argues for raising negotiated rates that were never the problem.

Common mistake: Building a new rate code by copying an old one and changing only the price. The copy inherits the original's segment mapping, cancellation rules and commission flag — so a direct promo that should be commission-free quietly accrues 10% agency commission, or reports into the wrong segment for a year before anyone reconciles it.

All glossary terms Source Code Market Segment PMS (Property Management System)