Dear WuBookers, managing revenue for an accommodation property requires a certain familiarity with industry terminology and, above all, with pricing and sales strategies. Among the various definitions worth knowing, both in theory and in practice, is certainly the BAR, or Best Available Rate. This metric allows you to structure your offers optimally and maximize revenue.

What Does BAR (Best Available Rate) Mean?

BAR stands for Best Available Rate, and refers to the most affordable price for guests, typically associated with flexible reservation and cancellation policies. The BAR is usually found on the hotel’s website or that of a B&B and is lower than the rate shown by OTAs and other distributors. For example, the same single room, for the same dates, might be offered at 85.00 euros per night on the hotel’s website and at 100.00 euros on an external agency’s site.

Be careful, however, not to confuse the BAR with the absolute lowest rate: the BAR is used to determine all other rates, including both higher and lower ones. It therefore does not rule out the possibility of premium offers or, conversely, special treatments, discounts, or reductions.

Let’s return to the previous example: if €85.00 is the BAR for a standard single room (bookable without restrictions and without extras), the luxury option might be €110.00, while the basic non-refundable alternative could be as low as €76.00.

It’s also common for the classic BAR (Best Available Rate for guests, flexible) to be accompanied by another similar rate, the non-refundable BAR: the same cost for travelers, but with different cancellation policies.

How to Identify the Best Available Rate

To calculate your property’s BAR, you need to consider several factors:

• hotel operating and marketing costs: the BAR should (at least) cover the expenses a hotelier incurs for maintenance and marketing. You must therefore factor in cleaning, services, utilities, and commission fees charged by any OTAs to ensure the best available rate is affordable for travelers and sustainable for the property owner, without incurring losses;
• competitors’ offers: it’s important that the BAR is not only proportioned to expenses but also aligned with the market. Analyzing competitors’ rates allows you to determine a local average on which to base your own base rate;

• seasonality and events: high and low seasons, as well as concerts, trade shows, and similar events, cause interest and reservations to rise or fall. The Best Available Rate (BAR) should also reflect actual market trends;
• historical rates: analyzing previous years can provide important insights into how demand fluctuates and how the market responded to past pricing strategies, thereby guiding the determination of the best available rate.

As can be seen, therefore, the BAR is not fixed and unchanging, but varies over time based on all these factors, thereby influencing the rest of the pricing structure as well. This practice is known as dynamic pricing, which allows you to dynamically update your offerings to consistently maximize profits.

Why Setting the BAR Is Important

Setting and adjusting the BAR is essential for property owners because it allows them to set a comprehensive offering, including surcharges, additional services, and cancellation policies that are more or less restrictive.

Furthermore, it is in itself an effective tool for improving occupancy and profit margins: a flexible BAR on the hotel’s website tends to encourage direct reservations, benefiting both the property and travelers, who secure accommodations at the best price available on the market.

Finally, a publicly displayed BAR allows for comparison with other online rates and the various packages offered, thereby creating the image of a transparent, trustworthy property that is capable of meeting diverse needs.

5 Mistakes to Avoid When Setting the Best Available Rate

Setting the BAR is the first step, but to get the most out of it, it’s important to pay attention to certain aspects and try to avoid making some fairly common missteps.

1. Overvaluing Your Property

Market analysis is essential not only for adjusting your offering based on competitors but also to avoid the risk of overestimating your property. This is a common mistake, especially when first starting out, when you don’t have much experience. Setting rates, starting with the BAR, that are too high relative to the actual value of the accommodation or how it’s perceived affects reservations and can lead to a drop in occupancy.

2. Continuously Offering Discounts and Promotions

Offering flexible and discounted rates year-round undermines the purpose of the Best Available Rate (BAR): although this isn’t necessarily the absolute lowest rate (it’s still possible to offer discount codes or non-refundable rates that are more affordable), the concept of the best available rate should remain valid. If, on the other hand, the property consistently offers reduced prices without restrictions, the BAR is no longer the rate established as such, but rather the promotional rate in effect most of the time. This has several consequences: all rates derived from the BAR must be adjusted, both upward and downward (and the numbers don’t always add up!); frequent guests will likely stop paying full price, since a new, more attractive offer will soon be available anyway; your hotel will be perceived as perpetually on sale, and that isn’t necessarily a good thing.

3. Confusing BAR and Rack Rate

Although they’re often confused, BAR and rack rate aren’t the same thing. BAR is the best available rate on a given date, typically a basic, refundable rate; the rack rate, on the other hand, is the maximum published rate, free of discounts and promotions. This is often used as a benchmark to advertise discounts and promotions to the public and thus entice travelers to book.

4. Setting and Updating the BAR Without Technological Support

Economic conditions and seasonal fluctuations can put a strain on the consistency of the BAR and derived rates. That’s why it’s advisable to use appropriate digital tools, such as Zak PMS. The management software by WuBook includes several features, including those for basic revenue management. Within the software, you can set each rate (including prices) manually or through automatic derivation from another rate. Additionally, in the yield management section, automatic price updates can be applied based on custom rules. For example, you can establish a price adjustment that increases or decreases the base rate depending on room availability. Rules, adjustments, and rates can always be monitored and modified within Zak. This makes it easier to keep everything under control and implement your strategies simply and immediately, without getting overwhelmed by countless spreadsheets!

5. Not Highlighting the BAR on Your Website

The BAR is a great rate for buyers, so it should be highlighted. Zak allows you to display, in the booking widget, a comparison between OTA prices and the BAR for direct reservations, based on a percentage set by the hotelier. More experienced travelers or those who regularly check agency portals and metasearch sites will notice the price difference anyway, but for everyone who visits the property’s website, clearly highlighting it could be decisive.

Setting the Best Available Rate is therefore essential to remaining competitive, attracting reservations, and improving the property’s profits.