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Pricing and the Negotiation Floor

The negotiation floor defines the maximum discount that the sales representative or sales manager can give to the customer after all prices have been returned by the pricing engine. The Negotiation Rate and Weekend Negotiation Rate cannot be set below the Average Floor and Weekend Floor, respectively. If the sales representative or sales manager wants to discount below the negotiation floor, then that user can submit a request to the revenue manager to approve the discount. For more information, see Revenue Management.

Table 78 shows an example of pricing for a property that does not have different rates for weekends and weekdays.

Given this example, Table 79 shows the values that appear in the Quote Room Blocks Negotiation Rates view.

The Average Rate is calculated as:

(100 X 200 + 150 X 30) / 130 = $188.46

The Average Floor is calculated as:

(100 X 180 + 30 X 135) / 130 = $169.62

On occasion, it is possible that the system calculated average rate falls below the average floor. In that case, the Average Rate is set to the same as Average Floor. In the example given in Table 79, if the real average rate from the calculation is less than 169.62 (for example, if it is at 165.50), it shows as 169.62.