Pearson New International Edition International pcl tp indd 1

FRONT OFFICE SEMANTICS
Market code:
Guest types differentiated by sales source. Typical market codes include transient and group.
Track code:
Guest types differentiated by traveler demographics. Typical track codes include those
related to the purpose of the traveler’s trip (such as business [corporate] versus leisure) and those re-
lated to LOS (transient versus long-term stay). A track code can be created for any traveler demographic
determined important enough to create and monitor a reservation field in the PMS.
Revenue managers who think they are too busy to closely monitor their com-
petitors’ rate information might use the service of companies such as RateGain
(www.rategain.com). These companies will create daily, weekly, or on-demand com-
petitor reports and e-mail them to the contracting revenue manager whenever a com-
petitor’s rates rise or fall below preselected thresholds.
When guests and competitors can discover rates online, the dynamics of rate
making change. Rates are often set independent of traditional operating cost consid-
erations. Instead, the hotel’s rates are more heavily influenced by the laws of supply
and demand. Assume that on a given Saturday all similar hotels in a market area offer
guestrooms in the range of $100 to $150 per night. It is difficult for a single hotel of
the same type to command a rate of $250 per night even if its operating costs justify
this rate. If the revenue manager of that hotel placed a $250 per night rate on the
hotel’s Web site, it is unlikely that any but perhaps the most brand-loyal consumers
would select the property. The Web is now the major source of traveler information
related to hotel room prices. Senior citizens, one of the last demographic groups to
log on, are using the Web in ever larger numbers. Future generations of travelers will
grow up without knowing anything except the Web as a source of travel-pricing
information, and the impact of that fact is tremendously significant.
In the past, if a traveler called a hotel directly, obtained the rack rate, and booked the
reservation, it would have been perceived by the hotel to be a successful sale. Today, after
making the hotel reservation, the traveler could go online to shop for an even lower price
for the same room. If the traveler finds a lower rate, he or she could recontact the hotel
to secure the new, lower rate. This consumer would likely feel frustrated that the hotel did
not offer its lower rate initially! As a result of this new operating paradigm, rate integrity