What is the definition of Rate Fences in the hotel industry?
Rate Fences are rules that relate to rates. Meaning that to book a definite rate, there will be exact conditions that will relate to your reservation.
If a hotel discounts a normal rack rate for a exact time period (i.e. flash sale) it usually aims to attract new clients who maybe would not be willing to pay a normal rate. However the hotel doesn’t want to present the same discounted rates to a consumer who is willing to pay the usual rate. Therefore, what the hotel can do is to Fences put so called ‘around the special offer rates’ to defend/ validate the non-discounted rates next to on hand clients (guests who have previously booked at an usual rate can´t ask for a discount anymore).
Hotels make use of rate fences as part of their comply plan and to optimize their revenue results.