Exploring our new Pricing Solutions – and what they mean for you
Pricing is paramount for both bookers and properties. To help you optimise how you deliver pricing and help your properties attract more bookers, we’re rolling out new Pricing Solutions.
With this new approach, we aim to give you clarity on optimal API usage for discounting. Our goal is to show you what can be achieved with the right exposure of discounted rates - and how you can turn automated pricing rules into dynamic discounts for properties to drive more conversions.
How connected properties set up pricing
Connected properties use a multitude of third-party software like business intelligence tools, revenue management systems, and yield management systems to make decisions about pricing. These prices and price rules are then distributed to Booking.com via Channel Managers, Property Management Systems or Central Reservation Systems - aka connectivity providers.
Once these prices are distributed, connectivity providers and properties have multiple ways to set up prices via the extranet or through Connectivity APIs.
How prices are received and calculated
Booking.com can receive prices in three distinct ways:
- As a Base Price through a Parent Rate (or)
- As a Derived Price through a Child Rate (or)
- As a Derived Price through a Promotion
These prices are ultimately determined by either results or rules:
- Results sent as a Base Price through a Parent Rate - results are the absolute values of a price, where we do not know the calculations or rules that created this price. These absolute values are sent via the Rates and Availability API.
- Rules sent as a Derived Price through a Child Rate OR through a Promotion - rules state how the price can change depending on the Parent Rate or Base Price (BAR). These rules are sent via the Rooms and Rate Plan Management API or the Promotions APIs. When providers don’t have an interface to support setup of Rate Plans and Promotions, connected properties set these up directly on the extranet. The Base Prices on which the rules are applied are sent via the Rates and Availability APIs.
The prices we receive from properties, directly or indirectly, are rules, results, or a mix of both.
Choosing the right API for maximum conversion of pricing solutions
The new pricing framework for properties is categorised as foundational, reactive and proactive:
- Foundational products are rate plans like the Non-Refundable Rate Plan. They are set up to appeal to the widest range of travellers. These products can only be set up as rate plans and don’t get any treatment on our platform or app.
- Proactive products like the Genius Programme are designed to support long-term revenue strategies like appealing to specific markets or improving visibility throughout the entire year.
- Reactive products help properties respond to unique circumstances and boost bookings at specific moments like using a Limited Time Deal to fill rooms at the last minute.
Both proactive and reactive pricing products can generally be sourced as Promotions or Rate Plans. But Promotions have specific benefits that may encourage you to choose the Promotions API when possible.
For example, using the Promotions API automatically gives your partners the benefit of optimal visibility through tagging and strike-throughs on our website. This can be significant when you consider that introducing a strike-through on a price can increase guest conversions by 5.4%.
To implement strike-through benefits as a default, use the Promotions API. If a property sets up Pricing Rules on your system, we recommend integrating the Promotions API into these workflows instead of developing an interface that simply replicates the extranet. We’ve seen that property usage is low in those situations. On the other hand, we’ve seen that Property usage is high when the Promotions setup is integrated with Pricing Rules and Rate Plans setups.
Room and Rate Plan Management API
When we asked, half of partners we surveyed said they apply promotions or discounts by lowering their prices, followed by those who said they use Booking.com deals. And, of course, many of them indicated that they rely on a combination of both, making their specific circumstances and approaches to discounting important in determining which API you should choose.
Here are a few possible reasons why some properties may prefer to send discounts as Rate Plans vs. Promotions:
- Performance analysis- Some properties want to track reservations happening on discounts in the context of their marketing budgets. To do this, they prefer using a Rate Plan setup.
- System dependencies - Some connected systems include pricing, marketing and reservation workflows that accept only Rate Plans (eg, certain CRS systems have price checks and only accept Rate Plans or a property uses a LOS pricing model to give prices but it is difficult to create LM discounts or free nights as Promotions).
- Channel parity - Similar to how some properties want to set up Promotions on the extranet to be distributed only to Booking.com, there are properties who want to maintain price parity across channels. For them, Promotions is not a standard way of distributing prices and they prefer using Rate Plans, especially, considering other OTAs give FE benefits for Rate Plans.
- HQ vs. franchisee setups in chains - Some chain HQs have not given approval for distribution of certain types of discounts (eg, Genius, Mobile Rates, Country Rates). The franchisee still wants to go ahead and set it up so their existing workflows are minimally impacted. These are set up as XML Res Rates with Rate Rewrites.
The importance of strike-through rates going forward
We want to improve property performance and also give strike-through benefits when Rate Plans are used for this, without compromising on operational efficiencies. Starting this year, we will be running a series of experiments to identify ways to give strike-through treatment and similar tagging benefits to discounts sourced via Rate Plans. We will be running these experiments in a phased manner spanning across all proactive and reactive pricing products. If proven successful, we will then be offering strike-through benefits for Rate Plans sourced via the Rooms and Rate Plan Management API as well.
Foundational, proactive or reactive? Learn all about the pricing framework.
- With our new Pricing Solutions, we aim to show you how properties can prosper with the right exposure of discounted rates and automated pricing rules
- How prices are received and calculated via the APIs - results vs. rules
- Which API you implement may depend on how your properties approach discounting