Revenue blog · 12 min read · 2 June 2026
What is Open Pricing and Why It Beats BAR-Plus-Discount Strategies
The first hotel I ran a full rate restructure on had thirty-one active rate codes. Every one of them was derived from a single anchor. BAR moved up A$10 on a compression Friday and thirty other rates moved up A$10 with it — including a corporate rate I had spent six months negotiating to hold flat. The corporate buyer noticed the next week. Open pricing in hotels is the model that breaks that dependency. Each segment, each fence, each channel moves on its own demand signal. BAR-plus-discount was a useful abstraction in 2008. In 2026, on any property with more than three segments, it quietly costs you ADR every time the anchor moves and the derived rates can't move differently.
What open pricing actually means in 2026
Open pricing is a rate strategy where every rate code, segment, and channel is priced independently of a single anchor rate. There is no master rate from which every other rate is derived. Each rate carries its own value, its own movement rules, and its own demand signal. BAR continues to exist as the published retail rate, but stops being the spine that every other rate hangs off.
The contrast is structural. Under BAR-plus-discount, a corporate rate is defined as "BAR less 12%", a wholesaler as "BAR less 22%". Move BAR, every downstream rate moves in lockstep. Under open pricing, the corporate rate is its own number — A$209, set by contract and demand signal, moving when the corporate segment moves, not when BAR moves. The wholesaler rate is its own number. Each lives or dies on its own merit.
It is not a new idea — it has been in the chains for fifteen years. Independents have come to it slowly because the operational cost is real: more rates, more rules, more places a mistake can hide. The compensation is that the model lets a property charge the price each segment is willing to pay, instead of the price implied by one anchor and a fixed offset.
The formula: how open pricing actually decides a rate
The arithmetic is not complicated. Under BAR-plus-discount, the rate for segment S on date D is:
Rate(S, D) = BAR(D) × (1 - discount(S))
One input determines every output. Under open pricing, the rate for segment S on date D is:
Rate(S, D) = f(demand(S, D), fence(S), channel cost(S), contract floor(S))
The function f is the rate manager's judgement, codified into a written ladder per segment. BAR is one input among several, no longer the determinant. A worked example on a 120-room urban property. Under BAR-plus-discount, BAR sits at A$329 and the others fall out automatically: corporate (Acme) A$289.52, wholesaler A$256.62, advance-purchase A$279.65, member A$302.68. Lift BAR to A$349 on a compression read and every rate lifts proportionally. Corporate now A$307.12 — but Acme negotiated for stability, not surge pricing.
Under open pricing on the same date, each rate is its own number. BAR A$329 lifts to A$349 on compression. Corporate holds at A$259 flat regardless of BAR movement. Wholesaler holds at A$229 — contracted floor, no compression signal. Advance-purchase A$259, lifts to A$269 on its own ladder. Member A$309, moves with BAR at half increment to A$319.
Same compression event, different propagation. Contracted segments stay flat. Transient segments lift. The corporate agreement is honoured. The compression upside on flexible segments is captured. The total revenue effect on a single compression Saturday is typically four to seven percent higher under open pricing on a property with this segment count.
Why BAR-plus-discount survives anyway
If open pricing is structurally better, the obvious question is why most independents still run BAR-plus-discount. Three honest reasons. One — it is simpler. One rate per day, every other rate derived. Open pricing multiplies that by segment count. Two — channel manager defaults. Most channel managers were built around a BAR-plus-discount frame; open pricing requires per-rate overrides and written rules per segment. Three — it papers over weak segmentation. If a property has not defined who the wholesaler segment is or how the corporate rate differs from BAR in any meaningful way, open pricing has nothing to act on.
The properties that successfully move to open pricing are usually the ones that first did the segmentation work. The model is a result of segment discipline, not a substitute for it.
BAR-plus-discount vs open pricing, side by side
A working comparison I keep on the wall of every revenue desk that is mid-transition:
| BAR-plus-discount | Open pricing | |
|---|---|---|
| How rates are set | One anchor (BAR), every other rate derived as a fixed % off | Each rate priced independently with its own ladder |
| What moves when BAR moves | Every dependent rate moves in lockstep | Only rates with movement rules tied to BAR move; others hold |
| Operational load | One number per day per property | One number per segment per day per property |
| Best for | Properties with weak segmentation or thin rate codes | Properties with 5+ active segments and clear fences |
| Honours contracted floors | Only via override workflow | Natively — contracted rates simply do not carry BAR-linked rules |
| Compression upside | Spread evenly across all rates whether earned or not | Captured on rates where compression is real, held on rates where the segment is unmoved |
| Parity risk | Low — derivation is mechanical | Higher — requires written ladder discipline |
| Review cadence | Daily on BAR | Daily on BAR plus weekly per segment |
Neither model is universally correct. The right model is the one that matches the segmentation maturity of the property running it.
Where open pricing breaks down
Four failure modes I have watched cost real revenue.
1 — Parity drift on flexible segments. Open pricing makes it easy to lift a member rate by A$10 on a compression read without checking whether the same lift hit BAR. If it didn't, the member rate is now above BAR. Parity violated. The fix is the same discipline that makes BAR (Best Available Rate) explained useful: every segment rate gets a parity floor and ceiling, written into the rule.
3 — Discipline collapse. Open pricing under-performs BAR-plus-discount when the rate manager doesn't have time for daily segment review. The single-anchor model has a shortcut. Open pricing has none. A property that loses the daily segment review drifts to BAR-plus-discount with extra steps.
4 — Over-segmentation. Open pricing works because each segment carries a distinct demand signal. Twelve rate codes where eight serve effectively the same segment gains nothing by pricing them independently. The fix is upstream — consolidate the rate codes first.
What to do about it — the five-step open pricing playbook
The sequence I run on every property considering the transition. Forty minutes per segment up front, ten minutes a day to maintain.
- Audit the live rate codes. List every rate code currently in the system. Mark each as contracted (corporate, wholesaler, group), flexible (BAR, member, advance-purchase), or distribution (OTA-specific, package). If the property has more than ten flexible rate codes, consolidate first. Open pricing on noise is just expensive noise.
- Write a ladder per segment. For each segment, write down the floor (the minimum the rate goes to), the ceiling (the maximum), the typical range, the demand signal it responds to, and the parity rule that constrains it. One A4 page per segment. The discipline is in the writing.
- Decouple the BAR-linked rates one at a time. Do not flip the whole system in one go. Move corporate first — usually the highest-value contracted segment, easiest to validate. Then wholesale. Then advance-purchase. Each takes two to four weeks of monitoring before the next transition. The risk of a single big flip is too high.
- Set the weekly segment review. Fifteen minutes per segment per week. Pace versus same-time-last-year on that segment alone. Mix shift on the segment. Booking-window position. The review is what keeps the segment-level ladder live. Without it, open pricing decays into static rates.
- Re-audit the model quarterly. Are the ladders still right? Has the segmentation shifted? Is there a segment that has collapsed and should be retired, or a new one that should be added? Open pricing is not a set-and-forget structure. It is a discipline that needs the same maintenance as the pricing it produces.
The ritual is small. Five steps, four to eight weeks on a mid-size independent, ten minutes a day to maintain. The compounding effect is what matters.
A real scenario: 95-key boutique, twelve months on open pricing
A 95-key boutique, urban CBD, six active segments, three years on BAR-plus-discount. The trigger was a corporate audit where two contracted rates had drifted three to five percent above their floors on compression dates. The relationship cost five months to repair.
The transition took ten weeks. Corporate decoupled first — held at A$249 flat, no BAR linkage. Wholesale next at A$219. Advance-purchase third, on its own ladder responding to booking-window position. Member rate last, given a softer link to BAR (50% of BAR movement, capped at +A$15). Three rates stayed on BAR-plus-discount because the volume didn't justify independence.
Twelve months of result. Blended ADR up 6.4% year-on-year — the recovery of compression upside on transient that BAR-plus-discount had been spreading flat across contracted segments. RevPAR up 4.8%. GOPPAR up 7.1% — channel mix shifted three points from high-commission OTA back to direct as the rate ladder gave direct a structural advantage. One channel manager configuration change. One day a week from the revenue manager.
The line from the owner debrief: "I didn't know we had been giving Acme a surge price." The contract said one thing. The rate model had been doing another.
How open pricing fits the rest of the stack
Open pricing is not a strategy on its own. It is the structural choice underneath a rate strategy. The strategy lives upstream — in segmentation discipline, the demand calendar, the rate fences, the pace reading. Open pricing is the lever that lets a rate strategy do what it intends to do, instead of being averaged across segments by a single anchor.
It pairs naturally with the inventory rules in length-of-stay restrictions — the restrictions decide who is allowed to book, the open pricing model decides what they pay — and sits inside the broader habit in hotel revenue management strategies for 2026. Public inputs I use to validate the segment ladders: the Australian Bureau of Statistics for accommodation occupancy and arrival data, and the Reserve Bank of Australia for macro indicators that shift corporate budget tightness quarter to quarter.
FAQ — open pricing in hotels
What is open pricing in hotels?
A rate strategy where every rate code, segment, and channel is priced independently. There is no single anchor rate from which every other rate is derived. Each rate moves on its own demand signal, within its own written ladder, governed by its own contract floor and parity ceiling.
How is open pricing different from BAR-plus-discount?
BAR-plus-discount derives every rate as a fixed percentage off a single BAR anchor — move BAR, every other rate moves in lockstep. Open pricing breaks the dependency. Each segment rate moves on its own. A corporate rate can hold flat through a compression event while the transient leisure rate lifts ten percent.
Does open pricing replace Best Available Rate?
No. BAR remains the published retail rate. What changes is how the other rates relate to it. Under BAR-plus-discount, the others are derived from BAR. Under open pricing, they are managed alongside BAR — each with its own movement rules and its own demand signal.
Is open pricing the same as dynamic pricing?
Dynamic pricing is any system that moves rates on a demand signal. Open pricing is the structural choice underneath — every rate priced independently rather than linked to one anchor. A property can run dynamic pricing inside a BAR-plus-discount frame, or run open pricing without any automation at all.
What are the risks of open pricing?
The main risk is parity drift — a segment rate moving above BAR by accident. The second is operational complexity — more rates, more rules, more places a mistake can hide. The third is discipline collapse — open pricing only works while the daily and weekly segment review is honoured.
Does open pricing work for independent hotels without a revenue management system?
Yes, in a constrained form. An independent property can run open pricing on three to five core segments manually, with a written ladder per segment and a weekly review. The full automation a chain runs is helpful but not structural to the model.
How long does open pricing take to show in the numbers?
The ADR effect surfaces inside the first full booking-window cycle, typically four to eight weeks. RevPAR follows once the new segment-level rates propagate through the pipeline. GOPPAR takes a quarter, because the channel-mix shift it enables is the larger lever.
A note on what this is for
Open pricing is one of the cheapest structural changes in revenue management. No new system, no new licence, no new staff. A configuration change in the channel manager, a written ladder per segment, and ten minutes a day to maintain. The cost of staying on BAR-plus-discount past the point where the property has the segmentation discipline to outgrow it is invisible — contracted segments quietly surge-priced, compression upside diluted across rates that didn't earn it, parity violations that surface six months later in an audit.
That structural choice is what we built RevPerfect for: a view of every segment rate alongside its ladder, parity floors and ceilings written down, and the weekly segment review the model needs to keep working. One input into the broader habit covered in hotel revenue management strategies for 2026. Try RevPerfect free → or book a 20-minute walkthrough.