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In some cases, the sales representative submits a quote evaluation to the revenue manager to request an override of the established negotiation floor rate. This situation typically occurs when the customer is bringing in a great deal of function space revenue and asks for a discount on sleeping rooms.
The sales representative first attempts to update the standard negotiation rate for the sleeping rooms. If the new rate is less than the established negotiation floor rate, the sales representative is prevented from completing the rate update. The revenue manager can, however, reduce the negotiation floor for the quote.
Revenue managers may decide that a profit and revenue advantage exists if the customer is given a rate that is lower than the established negotiation floor for a particular booking or event. By modifying the established negotiation floor rate, the revenue manager can set a new negotiation floor that is not constrained by the established price.
For example, a customer plans to spend a lot of money on catering products for his event and would like a discount on sleeping rooms. The property's benchmark rate for a sleeping room is $100 and the negotiation floor is set at $100. The sales representative wants to offer the customer a sleeping room rate of $90 dollars as an incentive for future business. The sales representative makes the recommendation in the comments field of the quote, and sends the quote to the revenue manager for evaluation.
This task is a step in Process of Revenue Management.
When the quoted negotiation rate for a room block is lower than the property's established negotiation floor rate, the revenue manager must modify the existing negotiation floor rate so that the sales representative can successfully apply a discounted rate.
After the revenue manager has modified the negotiation floor rates, the sales representative can set the negotiation rate for the room block to a value greater than or equal to the updated Avg Floor or the Weekend Floor rates.
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