Property Performance Course

Lesson 4: How our pricing foundations can support properties on the road to recovery

Travel restrictions and lockdown measures are impacting lives around the world, and this has influenced the way our customers plan their travels. Now more than ever, the need for greater flexibility is important. People want to continue dreaming and planning for the future, while feeling confident that their bookings are flexible enough to adapt to changing circumstances. At the same time, properties have told us that driving occupancy is still one of their top needs when it comes to how they approach making pricing decisions, especially during these challenging times.

1. Property Pricing

A core part of our mission at Booking.com – making it easier for everyone to experience the world – is encouraging our customers to discover, plan and book their next memorable experience on our platform. Our research shows that, while travellers are still looking for convenience and a wide selection, ultimately what matters most to them now is a great price and flexibility.

When it comes to future trips, some of our customers are early birds who prefer planning ahead and want to secure a great price far in advance. Others are willing to pay a bit more in case their travel plans need to change. There are also some who tend to book last-minute and don’t need the extra flexibility.

Today, our customer patterns are changing. On our platform, we’re seeing both local and last-minute bookings in countries where recovery is beginning, as well as future travel planning. In addition to the growth of domestic travel, we anticipate essential travel and business travel gradually returning as government restrictions are lifted and travellers feel more comfortable. Although these patterns continue to evolve, and social distancing and travel restrictions could still change, our goal is to strengthen our partnership so that together we’re ready to make the most of the return of travel demand.

We strive to make sure our customers always receive a great price, while making sure you and your properties are set up for success. For our customers, a great price needs to be:

  • Compelling: on an emotional level, travellers feel that they’re paying the right price for the experience they’re getting.
  • Transparent: travellers want to know the overall expected price upfront, so that they aren’t faced with any unexpected costs once they arrive at the property.
  • Competitive: travellers feel that the price they’re paying is reasonable compared to other properties they would be happy to book, or other places where they can book the same room or unit type.
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Rate Plans

While our approach to pricing is rooted in bringing the best value to our customers, we’re equally committed to supporting properties and their pricing strategy, both in the immediate term and when travel demand returns in the future.

We want to offer more clarity on how our pricing portfolio can support properties. That’s why we’ve created a framework to guide you and your teams. This framework will help you advise properties how to take full advantage of the value our selection of pricing opportunities can offer.

Our pricing opportunities are grouped into three categories based on properties’ specific revenue goals:

  • Foundation: this category is all about the importance of a tailored Rate Plan setup – offering travellers choice and flexibility – in optimising properties’ performance, especially as travel demand returns.
  • Proactive: once your properties have reviewed their Rate Plans on Booking.com, we recommend they explore our pricing solutions to reach their long-term goals. These solutions are designed to help them manage and increase occupancy over time, and they offer increased visibility and maximised reach.
  • Reactive: this category consists of pricing solutions that’ll help if properties need a short-term occupancy boost, when and where they need it most. Once properties have identified dates and rooms/units they need to fill, these pricing solutions can help them do that quickly.

One of the first steps a property takes is deciding on the Rate Plans to activate on our platform. A Rate Plan consists of a number of fundamental elements of a booking. In order to attract a wider variety of customers, especially during times when travellers are looking for more flexibility and peace of mind, we recommend properties establish a strong foundation for their businesses by optimising their Rate Plan setup.

The three Rate Plans we offer are:

  1. Flexible: generally the most expensive – and most booked – rate on our platform, which offers the greatest flexibility to travellers.
  2. Non-Refundable: a slightly cheaper Rate Plan, but it secures more guaranteed bookings and revenue, especially with price-sensitive travellers.
  3. Early Booker: usually the cheapest Rate Plan, but it makes your properties more attractive to travellers who prefer to plan and book ahead, helping to secure more revenue in advance and reduce cancellations.

Our data analysis shows that a combination of these three Rate Plans delivers the best results for occupancy. Without at least two of these Rate Plans in place, any other pricing opportunity that a property activates becomes less effective. In fact, if a property has all three of these Rate Plans active on Booking.com, our data shows that on average it will experience a 5% increase in bookings, an 11% increase in visibility and a 9% reduction in cancellations.

This is all the more important as travel demand continues to pick up and parts of the world experience different stages of recovery. Travellers want greater flexibility and choice as they step out to experience the world again, so we’re here to help make it easier for properties to reconnect with them and return to business stronger.

Properties should have complete control over which Rate Plan setup they choose to carry out their pricing strategy. Our role is to support their choice and make sure our customers always receive a great price from properties and have a great booking experience with us.

Our customers already turn to Booking.com for the great flexibility we offer. And our research shows that increasing the flexibility of properties' Rate Plans can increase the likelihood of customers making a booking. That’s why we’ve introduced a new flexible pricing policy to help properties secure more bookings in the current travel climate.

We’ve designed the new Flexible - 1 day policy so that properties can further optimise their existing Rate Plans in one easy step. Our recent data shows that properties that have implemented this policy experienced an increase in their visibility by up to 23%. We’re also making it easier for customers to find properties offering these flexible options on our platform, so that properties have greater visibility and a better chance of capturing more bookings.You and your properties know their pricing model and revenue strategy better than anyone. Our role is to make sure we deliver value by being as transparent and informative as possible. That way, properties have a strong understanding of how our pricing portfolio can support them in meeting their business needs, optimising their performance on our platform and ultimately reaching their goals. As we move along the road to recovery and engage with travellers to help them step out and experience the world again, we’ll continue to invest in our pricing portfolio to support properties and both their and your overall success in this new global environment.

2. Rate Plans
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Rate plans pricing narrative

One of the first steps a property takes is deciding on the Rate Plans to activate on our platform. A Rate Plan consists of a number of fundamental elements of a booking, including:

  • Cancellation policy
  • Price
  • Number of days between booking and check-in
  • Length of stay
  • Room or unit type
  • Meals, if available

In order to attract a wider variety of customers, especially during times when travellers are looking for more flexibility and peace of mind, we recommend properties establish a strong foundation for their businesses by optimising their Rate Plan setup.

We offer three Rate Plans. These are flexible, Non-Refundable and Early Booker.

Why is it valuable to properties?

  • A foundation of multiple Rate Plans can help properties get more bookings in advance, reduce cancellations and minimise the need for steep last-minute discounting to ensure rooms or units are occupied.
  • Using multiple Rate Plans allows a property to appeal to a variety of travellers – last-minute bookers, early birds and those seeking extra flexibility.
  • According to our research, any other opportunities a property activates are less effective if the property doesn’t already have at least two of these foundational Rate Plans in place.
  • Our data shows that a property with all three of these Rate Plans active on Booking.com will on average experience a 5% increase in bookings, an 11% increase in visibility and a 9% reduction in cancellations.
2.1. Flexible Rate

A flexible rate offers potential bookers Free Cancellation, so they have more freedom in case their travel plans or other circumstances change. Flexible rates tend to be the most expensive, because customers are willing to pay a bit more for extra peace of mind. These rates also generate the most reservations on Booking.com.

Why is it valuable to properties?

  • Properties receive more bookings with flexible rates than with any other Rate Plan.
  • Flexible rates are the most effective at converting lookers into bookers.
  • Many travellers are willing to pay more for greater flexibility in case their plans change.

How does it work?

  • If you have the Room & Rates Management APIProperties can set up and edit flexible rates through your system.
  • If you don’t have the Room & Rates Management API:

You can guide your properties through these steps to create a new Rate Plan:

  1. Log in to the extranet.
  2. Go to the ‘Rates & Availability’ tab and click on ‘Rate plans’.
  3. Click on ‘Add new rate plan’.
  4. Choose ‘Fully flexible’ and then click on ‘Add rate plan’.
  5. Follow the steps to select each of the factors that will make up the Rate Plan.
  6. Click on ‘Review’ to see a summary of the Rate Plan, and then click on ‘Go back’ if you need to make any changes.
  7. To save your changes, click on ‘Activate Rate Category’ or ‘Activate Rate Plan’.

You can guide your properties through these steps to edit one of their existing Rate Plans:

  1. Log in to the extranet.
  2. Go to the ‘Rates & Availability’ tab and click on ‘Rate plans’.
  3. Click on the Rate Plan you want to edit.
  4. In the ‘Policy’ section, click on ‘Edit’, select one of the flexible cancellation policies and then click on ‘Save’.
  5. To change any of the other factors that make up the Rate Plan, click on ‘Edit’ in the relevant section, make the changes and then click on ‘Save’.
  6. To finish, click on ‘Apply changes’.
2.2. Non-Refundable Rate Plan
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Non refundable

A Non-Refundable Rate Plan helps reduce cancellations by an average of at least 9%, and it can boost overall bookings by up to 5%. Prices for Non-Refundable rates are generally lower than flexible rates, but on the other hand this Rate Plan tends to generate more bookings. This is partly because these lower rates are more compelling for travellers looking for the best value.

Why is it valuable to properties?

  • Non-Refundable rates help secure more guaranteed bookings and revenue, especially for travellers on a budget.
  • Offering Non-Refundable rates helps to reduce cancellations by an average of at least 9%.
  • Because Non-Refundable rates are generally lower than flexible rates, they tend to be more visible to travellers looking for the best value.

How does it work?

  • If you have the Room & Rates Management API. Properties can set up and edit a Non-Refundable Rate Plan through your system.
  • If you have the Opportunities APIProperties are redirected to the Opportunity Centre to set up a Non-Refundable Rate Plan.
  • If you don’t have the Room & Rates Management API:

You can guide your properties through these steps to create a new Rate Plan:

  1. Log in to the extranet.
  2. Go to the ‘Rates & Availability’ tab and click on ‘Rate plans’.
  3. Click on ‘Add new rate plan’.
  4. Choose 'Non-refundable’ and then click on ‘Add rate plan’.
  5. Follow the steps to select each of the factors that will make up the Rate Plan.
  6. Click on ‘Review’ to see a summary of the Rate Plan, and then click on ‘Go back’ if you need to make any changes.
  7. To save your changes, click on ‘Activate Rate Category’ or ‘Activate Rate Plan’.

You can guide your properties through these steps to edit one of their existing Rate Plans:

  1. Log in to the extranet.
  2. Go to the ‘Rates & Availability’ tab and click on ‘Rate plans’.
  3. Click on the Rate Plan you want to edit.
  4. In the ‘Policy’ section, click on ‘Edit’, select ‘Non Refundable’ and then click on ‘Save’.
  5. To change any of the other factors that make up the Rate Plan, click on ‘Edit’ in the relevant section, make the changes and then click on ‘Save’.
  6. To finish, click on ‘Apply changes’.
2.3. Early Booker Rate Plan

Early Booker Rate Plan helps properties secure bookings in advance, and it’s usually the least expensive Rate Plan. Properties can offer customers this Rate Plan alongside a variety of cancellation terms or in combination with a Non-Refundable policy.

Why is it valuable to partners?

  • An Early Booker Rate Plan makes a property more attractive to travellers who prefer to book well in advance.
  • Offering Early Booker rates helps secure more bookings – and so more revenue – in advance.
  • Using an Early Booker Rate Plan tends to help reduce cancellations, because customers are more committed to their reservation.
  • Our research shows that the Early Booker Rate Plan helps properties appeal to up to 48% more potential bookers worldwide.

How does it work?

  • If you have the Promotions APIProperties can set up and edit an Early Booker Rate Plan through your system.
  • If you have the Opportunities APIProperties are redirected to the Opportunity Centre to set up an Early Booker Rate Plan.
  • If you have both the Promotions API and the Opportunities API. You can also redirect properties from the Early Booker display in your system to the Promotions API.
  • If you don’t have either the Promotions API or the Opportunities API:

You can guide your properties through these steps to create a new Rate Plan:

  1. Log in to the extranet.
  2. Go to the ‘Rates & Availability’ tab and click on ‘Rate plans’.
  3. Click on ‘Add new rate plan’.
  4. Choose ‘Early booker’ and then click on ‘Add rate plan’.
  5. Follow the steps to select each of the factors that will make up the Rate Plan.
  6. Click on ‘Review’ to see a summary of the Rate Plan, and then click on ‘Go back’ if you need to make any changes.
  7. To save your changes, click on ‘Activate Rate Category’ or ‘Activate Rate Plan’.

You can guide your properties through these steps to edit one of their existing Rate Plans:

  1. Log in to the extranet.
  2. Go to the ‘Rates & Availability’ tab and click on ‘Rate plans’.
  3. Click on the Rate Plan you want to edit.
  4. In the ‘Policy’ section, click on ‘Edit’, select your preferred cancellation policy and then click on ‘Save’.
  5. To change any of the other factors that make up the Rate Plan, click on ‘Edit’ in the relevant section, make the changes and then click on ‘Save’.
  6. To finish, click on ‘Apply changes’.
3. Flexible - 1 day policy rates
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Flexible 1 day

Flexible - 1 day lets properties quickly extend the Free Cancellation policies on a number of other Rate Plans they already have in place. This allows customers to cancel their booking free of charge up to one day before check-in, and helps generate more bookings and attract a wider variety of customers. Any Rate Plans that don’t offer a Free Cancellation policy remain unchanged.

Why is it valuable to properties?

Our research shows that increasing the flexibility of a property’s policies can make it more likely potential customers will book with them. In fact, in a study in April 2020, 73% of our customers who made a booking agreed that the ability to cancel for free was the main reason they chose to book at a specific property.

Especially in the current travel climate, this can help properties secure more demand and increase occupancy. Our data shows that properties who implemented the Flexible - 1 day policy experienced an increase in their visibility of up to 23%. We’re also exploring ways to increase properties’ visibility by making it easier for travellers to find these more flexible options.

How does it work?

  • If you have the Content API. Properties can convert an existing Rate Plan using the Flexible - 1 day policy through your system. They’ll need to select the policy with the ID ‘36’.

Please note: if a property converts any of its Rate Plans using the Flexible - 1 day policy in the extranet rather than through the Content API, we’ll block policy changes from the Content API on converted Rate Plans. We do this to prevent channel managers from overwriting policies the property has converted themselves in the extranet. We’ll only block overwriting in this way for 60 days, up until 8 July 2020. After that, we’ll restore your previous settings.

  • We’ll only block changes on any Rate Plans that the property converts using the Flexible - 1 day policy.
  • We’ll send you a descriptive error message when a change is blocked.
  • We welcome any feedback you have about this, and we’ll work with you to address any problems it may cause.

 

  • If you have the Opportunities APIProperties are redirected to the Opportunity Centre to change their policies there.
  • If you have both the Content API and the Opportunities AP. You can also help your properties to more quickly convert their Rate Plans by redirecting them from the Flexible - 1 day opportunity to the policy with ID ‘36’ in your Content API.
  • If you don’t have either the Content API or the Opportunities API:

You can guide your properties through these steps:

  1. Log in to the extranet.
  2. Go to the ‘Rates & Availability’ tab and click on ‘Rate Plan Optimisation’.
  3. Select the Rate Plans you want to convert to Flexible - 1 day and then click on ‘Convert’. We’ll update your Rate Plans within 30 minutes.

Multi-property partners can also convert Rate Plans to the Flexible - 1 day policy in bulk via the group extranet.

How can your properties change their Flexible - 1 day policy rates?

  1. To revert back to their original rates or change their Flexible - 1 day policy, your properties will need to log in to the extranet and go to the ‘Rates & Availability’ tab.

  2. If they try to change their Flexible - 1 day policy using the Content API, they’ll receive an error message asking them to log in to the extranet to make the change. This error message will read: ‘Trying to modify cancellation policies for product on fully flex for room x and rate y. Policy changes would be ignored. Please make these modifications from extranet.’

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