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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 give a discount below the negotiation floor, then that user can submit a request to the revenue manager to approve the discount. For more information, see Managing Hospitality Revenue.

Table 114 shows an example of pricing for a property that does not have different rates for weekends and weekdays.

The Floor value displayed in the table is calculated as Single Price minus Negotiation Floor. The Negotiation Floor value is set in the Property Pricing screen. In this case, the Single Price is 200.00 and the Negotiation Floor is 20.00. For more information about the Negotiation Floor value, see Setting Up Rates for Sleeping Rooms.

Given this example, Table 115 shows the values that appear in the Quote Room Blocks Negotiation Rates view.

The Average Rate is calculated as:

(100 multiplied by 200 plus 150 multiplied by 30) divided by 130 equals $188.46

The Average Floor is calculated as:

(100 multiplied by 180 plus 30 multiplied by 135) divided by 130 equals $169.62

On occasion, it is possible that the 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 115, 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.