Pearson New International Edition International pcl tp indd 1

Rate Determination
Despite some arguments to the contrary, this old saying likely applies to the devel-
opment of a hotel’s rack (standard) room rate: There is nothing new under the sun.
Professional hoteliers have, for centuries, been required to effectively price and mar-
ket their rooms. A uniquely modern (and many times, unfortunate) belief of some
contemporary hoteliers is that there are “new” ways to manage hotels (including the
pricing of rooms) and that these new methods are superior to the “old” ways. Some
hoteliers appear more interested in pursuing “today’s” methods than in reflecting on
lessons learned from history. As a result, looking backward is not considered valuable.
However, contemporary hoteliers can benefit from understanding the strengths and
weaknesses of traditional room pricing (and other operational) techniques. Then they