A rate multiplier is a calculation that is applied to rates before they are sent to a channel to adjust the rate for commissions and taxes.
When do you need to set up a rate multiplier?
Sell Rate vs Net Rate
Most channels expect hotels to provide the 'sell rate' (rate including commission/taxes) for each room. These channels do not need a rate multiplier, because the advertised rate will be equal to the rate set in the channel manager.
For example, if a rate of 100 is entered in the channel manager, channel with sell rates will advertise the rate as 100. These channels will typically take their commission from this value, so the amount the hotel receives in return is the net rate (sell rate minus commission).
Some channels expect hotels to be sent the 'net rate' (the rate excluding commission/taxes) for each room. These channels typically add their commission to the rate sent from the channel manager before advertising it to customers.
For example, if a value of 100 is entered into the channel Manager, and channel with net rates charges 20% commission, they will advertise the rate as 120.
The Rate Multiplier should be set for channels that expect a net rate, as this will provide the following benefits:
Simplified rate management in the inventory grid
Consistent pricing across multiple channels
Example
The following example compares two channels and the way they process commissions:
channel A expects to be sent the sell rate so does not require a Rate Multiplier
channel B expects to be sent the net rate (rate excluding commission of 20%), so a Rate Multiplier of 0.80 has been set up. This rate means the room rate of 100 will be multiplied by 0.80, sending a value of 80 to the channel. The channel will then add their 20% commission to the rate which returns the price to 100, the price advertised to guests.
Set a rate multiplier for your channel
You may occasionally need to change the rate multiplier for a number of reasons, including changes of tax and channel commissions.
To set up a rate multiplier for a channel, or to edit an existing rate multiplier:
Click on the CHANNELS tab
Select the channel you want to edit and click CONFIGURE
Select the CHANNEL SETTINGS tab
Next to Rate Multiplier click the cog icon
Make the required changes:
Enable or Disable the feature
Set the Rate Multiplier value (E.g. Setting a value of 1.2 will increase the rate values sent to this channel by 20%) - The rate multiplier box supports up to 18 characters, up to 18 values before the decimal but only up to 4 values after the decimal (E.g. if you set a multiplier of 0.95238 it will round automatically to 0.9524).
Click on Save
The multiplier is a number that the rates will be multiplied by, so a number lower than 1 will reduce the price and a number higher than 1 will increase the price.
Here are a few example to explain how this works:
1: leaves the rate the same.
1.2: is equivalent to +20% added to the rate. If the rate is 100$ then 100x1.2=120$ which is the same as 100+20%=120$
0.8: is equivalent to -20% on the rate. If the rate is 100$ then 100x0.8=80$ which is the same as 100-20%=80$
20: is equivalent to +1900% added to the rate. If the rate is 100$ then 100x20=2000$ which is the same as 100+1900%=2000$. It is important to understand that 20 is not the value expected for an increased price of +20%, if you want a small increase and set your multiplier to a very high value like 20 you would be setting a steep price for your rooms
0.2: is equivalent to -80% on the rate. If the rate is 100$ then 100x0.2=20$ which is the same as 100-80%=20$. It is important to understand that 0.2 (or 0.20) is not the value expected for a discount of -20%, if you want a small discount and set your multiplier to a very low value like 0.2 you would be severely underselling your rooms
Please note: It is important to understand that all rates entered for this channel will be multiplied by the value entered in the Rate Multiplier field before being sent to the booking channel. An incorrect Rate Multiplier means that you will be selling your rooms at the wrong price.
Add rate multiplier overrides
Rate multiplier overrides allow you to set a different rate multiplier for a specific date range. For example, your rate multiplier is ‘0.9’, but from Nov–Jan, you want to automatically change it to ‘1.0’.
To add rate multiplier overrides, follow these steps.
Ensure you have set a rate multiplier for the channel, as this is needed before rate multiplier overrides can be used.
In the channel’s settings, click Add Rate Multiplier Override.
Select the From date and To Date for when the override will apply.
Enter the rate multiplier value into ‘Override rate multiplier by .
Click Save.
A maximum of 5 overrides can be added at one time.