Hotel Policy – Best Practices
Hotel room prices are influenced by the location of the hotel, major events happening in the area, and the seasonality of the industry (among many other factors). We recommend you configure your hotel policy based on the nature of your travel and trends. Below are some of the best practices that will help you strike a balance between the achieve cost controls and the booking experience of your travelers.
Maximum class allowance
The star rating of hotels is a widely accepted standard in the hotel industry. The higher star ratings mean better room quality, amenities, and overall service at the hotel. But it also means higher costs (and the costs also vary based on the location of the hotel). If you are unsure of the per night cost of the stay for your destinations, you can choose to apply star rating limits.
Some examples of hotel brands and their star ratings are listed below:
- One-Two star: Econolodge, Quality Inn, Days Inn, Super 8, Travelodge, Sleep Inn, Rodeway Inn, etc.
- Three stars: DoubleTree, Embassy Suites, Hyatt Place, Crown Plaza, Residence Inn, Sheraton, Courtyard, etc.
- Four stars: JW Marriott, Westin, Sofitel, Hyatt Centric, Grand Hyatt, etc.
- Five stars: Ritz Carlton, Autograph, Banyan Tree, Fairmont, Unbound Collection, etc.
Absolute price limit (per night including taxes & fees)
In the hotel industry, it is common practice to show the room rates excluding any taxes & fees. Oftentimes, you are not aware of any applicable fees until you reach the checkout screen. In the Routespring app, we avoid all such surprises by including all the applicable taxes & fees to the room rates. So, with Routespring, the price limits are applied to the total estimated cost per night (including all the taxes & fees).
We recommend that you consider looking at your historic data to set the absolute price limit. If you are unsure, then we recommend just applying either class restrictions or the relative price limit.
Relative price limit
When you search for hotels at any location, Routespring fetches all the room rates within at least 5 miles radius of the given address and evaluates the median price (including taxes & fees). This median price is used for calculating the relative price limit.
You can set the percentage or dollar amount relative to price limits. For example, if the median price is $200, then with a 20% relative limit, the maximum price limit will be $240 (20% above the $200 median price). Whereas, in the same example, if you configure a $50 relative limit, the maximum price limit will be $250 ($50 above the $200 median price).
If you are unsure what relative limit to set, we recommend you start with a 20% relative limit. You can change it anytime as you gain more insights & data on your hotel booking patterns.
Absolute & Relative price limit
If you apply both absolute and relative price limits, then the lowest of the two will act as the price limit. For example, if your absolute price limit is $250 and a relative limit is 20%, then with a $100 median price the limit will be set to $120 i.e. anything above $120 will be flagged out-of-policy. With the same policy, if the median price is $300 (i.e. relative limit = $360), the absolute limit of $250 will apply as the price limit.