{"id":22672,"date":"2020-04-13T14:02:54","date_gmt":"2020-04-13T14:02:54","guid":{"rendered":"https:\/\/www.xotels.com\/uncategorized\/rate-fences\/"},"modified":"2024-12-23T09:21:16","modified_gmt":"2024-12-23T09:21:16","slug":"rate-fences","status":"publish","type":"post","link":"https:\/\/www.xotels.com\/en\/glossary\/rate-fences","title":{"rendered":"Rate Fences"},"content":{"rendered":"<p>What is the meaning \/ definition of Rate Fences in the <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/hospitality-industry\">hospitality industry<\/a>?<\/p>\n<p>Rate Fences are rules that apply to rates. Meaning that to book a certain rate, there will be specific conditions that will apply to your reservation.<\/p>\n<p>If a <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/hotel\">hotel<\/a> discounts a standard <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/rack-rate\">rack rate<\/a> for a specific time period (i.e. flash sale) it usually aims to attract new clients who maybe would not be willing to pay a standard rate. However the hotel doesn\u2019t want to offer the same discounted rates to a customer who is willing to pay the standard rate. Therefore, what the hotel can do is to put so called Fences \u2018around the special offer rates\u2019 to protect\/ justify the non-discounted rates against existing clients (guests who have already booked at a normal rate can\u00b4t ask for a discount anymore).<\/p>\n<p>Hotels use rate fences as part of their <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/yield\">yield<\/a> strategy and to optimize their revenue results.<\/p>\n<p>There are different scenarions in which you can use fenced rates::<\/p>\n<ul>\n<li>High demand period\n<ul>\n<li>To protect <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/inventory\">inventory<\/a> from selling out to fast during a high <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/demand\">demand<\/a> period.<\/li>\n<li>To avoid many reservations with a short stay, and generate more longer <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/stay\">stay<\/a> through reservations.<\/li>\n<li>To avoid loss of revenue from lastminute cancelation risk, i.e. during citywide events, and not being able to resell the rooms.<\/li>\n<\/ul>\n<\/li>\n<li>Low and medium demand periods\n<ul>\n<li>Launching discounted offers to increase demand potential, but with conditions protecting the exisitng demand from being diluted into lower rate levels<\/li>\n<li>Targeting specific niche markets (i.e. senior citizens, or membership rates)<\/li>\n<li>Promotional campaigns via targeted <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/channels\">channels<\/a> (i.e. <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/flash-sales\">flash sales<\/a>).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>Examples of Fences are: advance <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/booking\">booking<\/a> cutoffs or non-refundable payments.<\/p>\n<p>We can also classify Fences in the following categories:<\/p>\n<ul>\n<li>Geographic fences to target a specific, new market,\u00a0Time-of-purchase fences, for example <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/early-bird-discount\">early bird<\/a> bookings, targeting people who are <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/booking\">booking<\/a> way ahead their arrival in the hotel.<\/li>\n<li>Distribution channel fences. This might be a bit problematic since most hotels practice <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/rate-parity\">rate parity<\/a> to participate in the <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/ota\">OTA<\/a> programs. A good deal with a particular OTA in exchange for exclusivity could be an example.<\/li>\n<li>Opaque channel fences. <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/wholesaler\">Wholesaler<\/a> packages or platforms like Priceline are examples here of. The identity of the hotel is not transparent to the customer until after they make the purchase or, in the case of the package, the exact hotel rate is \u00b4hidden\u00b4 in the package.<\/li>\n<li>Product fences. Can be discounts for specific rooms which don\u00b4t sell good in order to promote them.<\/li>\n<\/ul>\n<p><strong>See also: <\/strong><\/p>\n<ul>\n<li><a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/fenced-rate\">Fenced Rate<\/a><\/li>\n<li><a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/maxlos-maximum-length-of-stay\">MaxLos<\/a><\/li>\n<li><a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/minlos-minimum-length-of-stay\">MinLos<\/a><\/li>\n<\/ul>\n<p><strong>Synonyms<\/strong><\/p>\n<ul>\n<li>Rate Fences<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>What is the meaning \/ definition of Rate Fences in  [&#8230;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[9,47],"tags":[],"class_list":["post-22672","post","type-post","status-publish","format-standard","hentry","category-glossary","category-r"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Rate Fences Definition \/ Meaning - Xotels<\/title>\n<meta name=\"description\" content=\"Definition: Rate Fences are rules that apply to rates. 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