Understanding Derived Rates
What is derived pricing?
Derived pricing is an easy way to set rates for rooms with multiple occupancy options. You simply create a standard rate for the ‘base’ or maximum occupancy of a given room. The ОТА will then automatically add or subtract a percentage price per person when the occupancy increases or decreases. This way, you’ll stay in control of your standard rate without having to manually update rates for other occupies.
Derived rates calculate their prices by adding or subtracting amounts (Derived Amount rate) or percentage (Derived Percent Rate) to/from an existing standard rate. When the prices in a standard rate change, the prices in the rates derived from it change automatically as well. This facilitates rate management significantly and reduces the possibility of errors.
Here are some cases, where derived rates can be especially useful:
- Rates for different boards. Often the price for accommodation including meals (BB, HB, FB) is higher than fixed room-only price. This can be managed conveniently with a derived amount rate based on the room-only rate.
- Rates for different number of guests. If the price of a single room is 80% that of a double one, its price can be set with a derived percent rate as -20% of the double room price.
- Group rates. Often group rates offer a percentage discount from standard prices. Again, derived rates can be used here for easier management.
- Promotional rates. Using derived percent rates you can set promo rates, which offer discounts for specific periods and are calculated automatically.
How Derived rates works with Effective Tours
In case if your property has one of the above derived rates using scenario then all you have to do is to follow the next 2 steps:
1. Decide which rate should be a ‘base’ rate – most common scenario is a Double (DBL) rate
2. Contact your OTA where you want to create a Derived rates scenario and ask them to create a derived rate for your rate Nr____ by adding fixed amount or percent on top of the rate you are sending from ET for each additional guests. For example: Please add 10$ for each person from 3 to 6, for the rate Nr:3433434.
That’s it! As soon as your OTA is configured, you have to update only ‘base’ rate in ET and all derived rates will be updated in the relevant OTA automatically.
IMPORTANT: PLEASE NEVER TRY TO MAP DERIVED RATES IN EFFECTIVE TOURS !!!
This may lead you to the overbooking!
You have to map and update from ET only the ‘base’ rate