Revenue Management 101
Forecasting, pricing, protection, overbooking and displacement, with calculators.
Read →Expertise/Revenue Management /Market Segmentation
FIELD NOTE · ROOMS REVENUE, AFTER USALI
Market Segmentation
Every room night carries a name, a price logic, and a paper trail. Read it the way the business flows — left to right, segment to agency — and it can be learned once, and never confused again.
SEGMENT → SUB-SEGMENT → RATE CATEGORY → RATE CODE → CHANNELS → AGENCIES
I
§ First, the Three Segments
All rooms revenue is one of three things. Start here; everything else is a refinement of these.
SEGMENT I · FEWER THAN 10 ROOMS A NIGHT
Transient
The individual traveller — rooms and suites sold to parties of fewer than ten rooms a night, including guests in permanent residence. Priced daily; the segment where revenue management is a craft.
OPENS INTO — RETAIL · DISCOUNT · NEGOTIATED · QUALIFIED · WHOLESALE
SEGMENT II · 10+ ROOMS, UNDER CONTRACT
Group
Blocks of ten rooms or more a night, sold pursuant to a contract. Recorded net of discounts to wholesalers for selling large blocks; rebates granted directly to a group are contra revenue.
OPENS INTO — CORPORATE · ASSOCIATION · GOVERNMENT · TOUR · SMERF
SEGMENT III · A BLOCK HELD OVER 30 DAYS
Contract
A consistent block of rooms committed for an extended period — over thirty days — recorded net of discounts. Certainty bought at the cost of rate; the base layer beneath the yield.
OPENS INTO — AIRLINE CREW · TRAINING · INCENTIVE PROGRAMMES
II
§ The Snapshot, Laid Flat
The whole taxonomy in one table, read left to right: each segment opens into its sub-segments, each sub-segment into its rate categories — and every rate category shows an example rate code, the channels it trades on (the solid chip is its home channel), and the agencies behind the trade channels. Click any named cell to open its meaning.
MARKET SEGMENT →
SUB-SEGMENT →
RATE CATEGORY →
EXAMPLE CODE →
CHANNELS — MANY →
AGENCIES, VIA THE TRADE CHANNELS
SEGMENT I · TRANSIENT
Transient +
Retail +
Best Available Rate +
BAR01
Brand.com / App
Voice
Property Direct
GDS
OTA
Direct — no agency
OTA Retail +
OTARET
OTA
Booking.com
Agoda
MakeMyTrip
OTA Merchant +
OTAMER
OTA
Expedia
Hotels.com
Trip.com
Loyalty Member Rate +
LOYR
Brand.com / App
Voice
Direct — no agency
Consortia +
CONS
GDS
Virtuoso
Amex FHR
Signature
Serandipians
Discount +
Advance Purchase +
ADV14
Brand.com / App
OTA
Voice
Direct — no agency
Packages +
PKGBB
Voice
Brand.com / App
Property Direct
Direct — no agency
Promotions +
PROMO
Brand.com / App
OTA
Mirrored Brand Direct
Direct — no agency
OTA Opaque +
OPQ
OTA
Priceline
Hotwire
Negotiated +
Corporate Negotiated (LNR) +
LNRACM
GDS
Brand.com / App
Voice
Property Direct
CWT
BCD Travel
Amex GBT
FCM
Government Contractor +
GOVN
GDS
Voice
CWT
BCD Travel
Amex GBT
FCM
Account Consortia +
CONSN
GDS
Virtuoso
BCD Travel
Qualified +
Government Transient +
GOVT
Voice
Property Direct
Brand.com / App
Direct — no agency
Membership Clubs +
AAA
Brand.com / App
Voice
GDS
Direct — no agency
Loyalty Redemption +
REDM
Brand.com / App
Voice
Direct — no agency
Employee, Friends & Family +
EMPFF
Property Direct
Brand.com / App
Voice
Direct — no agency
Wholesale +
FIT Wholesale +
WHFIT
Wholesale Direct Connect
Hotelbeds
TBO
Miki Travel
Kuoni GTA
SEGMENT II · GROUP
Group +
Corporate +
Corporate Group +
GCORP
Property Direct
Amex M&E
CWT M&E
BCD M&E
Association / Convention +
Association Block +
GASSN
Property Direct
PCOs
Convention bureaux
Government +
Government Block +
GGOV
Property Direct
Direct — no agency
Tour / Wholesalers +
Tour Series & Ad-hoc +
GTOUR
Property Direct
Wholesale Direct Connect
Tauck
Abercrombie & Kent
Cox & Kings
SMERF +
SMERF Block +
GSMRF
Property Direct
Wedding planners
Event agencies
SEGMENT III · CONTRACT
Contract +
Airline Crew +
Crew Block +
CCREW
Property Direct
Airline accounts
Corporate Training +
Training Block +
CTRNG
Property Direct
Direct — no agency
Incentive Programmes +
Incentive Block +
CINCV
Property Direct
Programme administrators
RATE CODES SHOWN ARE ILLUSTRATIVE — EVERY HOUSE NAMES ITS OWN; THE STRUCTURE IS THE STANDARD. A RATE CODE MAY TRADE ON SEVERAL CHANNELS — THE SOLID CHIP IS ITS HOME CHANNEL — BUT EVERY RESERVATION ARRIVES THROUGH EXACTLY ONE. EVERY SUB-SEGMENT ALSO CARRIES AN “OTHER” BUCKET FOR WHAT REFUSES TO BE CATEGORISED.
III
§ The Rule That Keeps It Honest
The rate code is simply the key under which a rate is loaded — every house names its own, and one code may be distributed across several channels at once. The discipline is this: every reservation arrives through exactly one channel, and the trade channels carry many agencies. Respect that and every commission, net rate and production report reconciles itself.
A RATE CODE
BAR01
The Best Available Rate, as this house happens to name it
TRADES ON
MANY
ITS CHANNELS
Brand.com / App
Voice
Property Direct
GDS
OTA
One code, distributed wide — yet every reservation lands through exactly one of these.
EACH CARRIES
MANY
THE AGENCIES, PER TRADE CHANNEL
GDS — CWT, Amex GBT, Virtuoso
OTA — Booking.com, Expedia
Direct — no agency
Agencies attach to the trade channels; each files its own production.
The Channel Mix
EVERY SOURCE, AFTER USALI’S OPTIONAL CHANNEL-MIX SCHEDULE
Brand.com / Brand Apps
WEB · DIRECT
The hotel’s own web and mobile storefront. No intermediary, no commission — the channel every strategy tries to grow.
No agency — direct
Mirrored Brand Direct
MIRRORED
Third-party sites mirroring brand.com inventory and rates in real time — direct business wearing a partner’s coat.
Mirrored partner sites
Voice
CENTRAL RESERVATIONS
The reservations office — where packages are sold well and complexity is handled by a human.
No agency — direct
Property Direct
ON PROPERTY
Walk-ins, calls and emails to the house — and its own sales office placing groups and contracts.
M&E agencies
PCOs
Planners
GDS
GLOBAL DISTRIBUTION
The travel trade’s pipework — corporate TMCs and consortia advisors book through it.
CWT
BCD Travel
Amex GBT
Virtuoso
Amex FHR
OTA
ONLINE TRAVEL AGENCY
Retail, merchant and opaque models, each with its own money flow and accounting treatment.
Booking.com
Expedia
Agoda
MakeMyTrip
Priceline
Wholesale Direct Connect
BEDBANK · TOUR OPERATOR
Bedbanks and tour operators on contracted connectivity; the guest never sees the room rate.
Hotelbeds
TBO
Miki Travel
Tauck
A&K
Other
UNCATEGORISED
The honest bucket — whatever refuses to be categorised, kept small by discipline.
IV
§ The Night-Audit Quiz
Six reservations land on your desk. Tag them. The audit is kinder here than at 2 a.m.
SIX RESERVATIONS · UNTAGGED
RES. 01
A guest pays Expedia in full at booking; the hotel later receives the agreed net rate.
Transient · Retail — OTA Merchant
Transient · Retail — OTA Retail
Transient · Discount — OTA Opaque
Transient · Wholesale
RES. 02
An airline signs for twelve rooms, every night, for the next twelve months.
RES. 03
A family blocks forty rooms for a wedding weekend.
RES. 04
A guest books the Bed & Breakfast rate on the hotel’s own website.
Transient · Retail — BAR
Transient · Discount — Packages
Transient · Wholesale
Transient · Qualified — Membership
RES. 05
A consultant books her firm’s ID-required corporate rate through the GDS.
Transient · Retail — Consortia
Transient · Qualified — Membership
Group — Corporate
Transient · Negotiated — LNR
RES. 06
A member redeems points for a suite; the brand reimburses the hotel by formula.
Transient · Qualified — Loyalty Redemption
Transient · Retail — Loyalty Member Rate
Transient · Discount — Promotions
Contract
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