Room Rate | Type of Room Rate

A room rate is the charge of accomodation for given night. There is standard rate designed for each room in hotel. The maximum retail price of room for a day is Rack rate. A hotel has its own policy on room rate but cheap accommodation will be given if the occupancy is very low.  A hotel normally develops a price range of rate between minimum to moderate to maximum. The rate are evaluated to see if they cover fixed cost , variable cost and overhead.


1. Rack rate :- These rates are determined by front office management to put in tariff .It is the maximum retail price of rooms for a day 

2. Group rate :- Group arrivals blocked large number of room. For purchasing room in volume they receive discounts which are lower than rack rate . It is exclusive discounted rate for group

3. Corporate rate :- This rate is for big companies who have frequent Businesses with hotel

4. Incentives rate :- It is the rate for head of business companies to promote future business.

5. Promotional rate :- This rate is charged during off season to promote occupancy . Similarly , promotional rates are also offered to important business person to attract them.

6. Family rate :- It is the rate for a family. It is total package offered to a family. The rates will be lower as family are important component of business.

7 package rate :- It is set for special time and festival . It offers several benefits and features for those who wants to purchase package. e.g of this package are , honeymoon package , New year package , summer package , winter package e.t.c .


During the period of guest stay there may be a change of room and change of rate. A guest may change / shift his room and rate may increase or decrease, the front office should immediately inform the other departments other wise it will create problem.

  • The restaurant should know change of plan
  • The cashier needs to change the room number and rates
  • The telephone operator should also need to change guest index.
  • The Housekeeping should know to make the sure the vacant Room be make up and care for any specific requirements.

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