Pearson New International Edition International pcl tp indd 1

FRONT OFFICE SEMANTICS
Fade (rate):
Reduced rate authorized for use when a guest seeking a reservation exhibits price (rate)
resistance. Sometimes called 
flex rate.
A fade rate is initiated when a potential guest exhibits price resistance after being
quoted a room rate. For example, a family traveling on vacation may enter a hotel
lobby as a walk-in and inquire about renting a room. If the front desk agent quotes a
price of $100 per night and believes these potential guests will decline the rate to seek
less costly accommodations, the agent may be empowered to fade, or flex, the rate to
a lower level. In this example, for instance, the agent may be authorized to fade
(reduce) the original quote by $10 in an effort to sell the room.
The use of fade rates requires excellent training of front desk agents so that they
know how to justify the fade, or else sophisticated travelers will wonder why they
were not offered the more attractive rate originally. Fade rates can, however, be
very effective. In a hotel located at the entrance/exit of a major interstate highway,
large numbers of travelers may arrive at the hotel without a reservation and inquire
about rates. When rate resistance is encountered, some FOMs authorize their front
desk agents to fade the rate if it is the guest’s first time visiting the hotel. Most trav-
elers will likely be first-time visitors, so this fade approach may be effective and will
likely be perceived as a logical marketing strategy to many potential guests.
Given the number of room types found in a typical hotel and the number of rate
types associated with each room, you can appreciate the complexity of managing a
hotel’s room rates. Add to that challenge the fact that each rate type can be dis-
counted or increased by any number of percentages and at various times of the year
or in response to specific special events. Now the true intricacies of the rate manage-
ment process become apparent. Despite the difficulties involved, however, initial
room rates must be determined.