Room Setup and Derivation
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      1. RoomPriceGenie Knowledge Base
      2. Pricing Strategy
      3. Room Setup and Derivation

      Room Derivations

      The article explains the concept of the reference room and how to set room derivations in RoomPriceGenie.

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      When we set your RoomPriceGenie account, by default, we set and map all the room types we can see in your PMS or Channel Manager (whichever we are connected to).
      Then we choose your Reference Room type.

      What is the Reference Room?

      In RoomPriceGenie, we always select one of your rooms as the Reference Room. The Reference Room type in RoomPriceGenie is the room type that is a base for deriving the rest of the room types. 
      By setting one price, and keeping others with a constant relationship to that, the process of pricing becomes more structured and stable. The benefits of this approach are as follows:
      • It simplifies the structure, meaning when you know one rate you know all the others.
      • It saves time updating rate plans and room types. 
      • It makes it easier to keep control over all your rates.
      • It is less prone to error.

      How does the room derivation work?

      All other room types can be derived from the Reference Room Type with a fixed derivation expressed in absolute values (e.g. +$20) or a relative derivation (e.g. +10%). By default and most commonly we use the relative derivation, but we can change it at any time depending on your preference.

      • Absolute Derivation

        You derive between different room types using a fixed amount. Example: The Double Room is your Reference Room and you want the Single Room to always be $20 cheaper. If choosing absolute values be careful when prices get very low or very high as the relationship between rooms may not be optimal.
       
      Absolute derivation values between room types.
       

      • Relative Derivation

        You derive between different room types using a percentage. Example: The Double Room is your Reference Room and you want the Single Room to always be 15% cheaper. By default, and most commonly we use relative derivation.

      derivation rulesRelative derivation values between room types.

       

      NOTE: If choosing absolute values be careful when prices get very low or very high as the relationship between rooms may not be always optimal.

       

      Lock the Derivation when changing the Base Price of the Reference Room

      Especially in the beginning, when you might want to play with your general price level, you can lock the derivation values. This allows changing the base price of your Reference Room Type while keeping the derivation values (and recalculating the base prices of your derived room types). If unlocked, it will keep the base prices of your derived room types, but recalculate the derivation value instead.

      Example: Assume you would like to change the Base Price of your Reference Room from $165 to $180. The derivation for the Superior Room is set at +25 % with a Base Price of $206.

      • If the derivation values are locked: the derivation remains at +25%. Thus the Superior Room would now have a Base Price of $225. 
      • If the derivation values are unlocked: the derivation would instead change to +15% and the Base Price of the Superior Room would remain at $206.

      derivation rules_lock

      The Lock Derivation option for the reference room is within the Rooms Setup tab.

      derivation rules_lock symbol
      The lock symbol in the categories list is informing you about the fixed derivation rule.

       

      NOTE: On the higher plans, Advanced and Professional, you have the option to yield your different categories individually. 

      Example: If your double room types are selling more quickly than your single room types, our algorithm would increase the prices for the double room types, and drop the prices for your single room types. Read more about yielding tags here.

       

      How to set, edit and manage room derivations?

      Setting up and managing room derivations in RoomPriceGenie is quite a straightforward process which follows these steps, in general:
      1. Go to Pricing Strategy and Room Setup.
      2. Click on the room type you like to edit.
      3. Type in the derivation from the reference room either as a fixed price or as a percentage.
      4. Press Save.

      • Absolute Room Derivations

        (we are currently in the process of updating our knowledge base to the new UI. Thank you for your understanding in case you still see an outdated display. Nonetheless, the step-by-step guide will remain the same.)


      • Relative Room Derivations

        (we are currently in the process of updating our knowledge base to the new UI. Thank you for your understanding in case you still see an outdated display. Nonetheless, the step-by-step guide will remain the same.)