How do discounts affect an underwriting model?
Published October 1, 2026 · 1 minute read
The answer
Discounts reduce the rate actually earned and may change booking volume or stay length. Model the realized price rather than the displayed standard rate. Separate launch promotions from the recurring pricing assumption.
A strong occupancy figure supported by heavy discounts can overstate the appeal of your normal price. Compare the additional contribution from bookings with the revenue given up on nights that might otherwise have sold.
This answer is general education. Apply it to the property's actual location, agreements, and circumstances. Where a decision requires professional advice, use a qualified adviser.
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