Everyone is asking this very question. What is rate parity and why is it affecting my online presence and diluting my brand. Well, here it is –
Disparity is the difference between quoted prices on hotel/guest houses/bed and breakfasts own website and those shown by online travel agents (OTAs) and other third-party channels. Disparity dents your profits by reducing the incentive for users to book direct, damages your reputation, causes customer confusion, and can create tension with your distribution partners.
Disparity can damage your hotel’s brand reputation by presenting a confusing, inconsistent message to potential guests, which undermines their confidence that they’re getting good value for money. Being undercut by OTAs discourages direct bookings on your own website, by sending customers through channels to which you have to pay a cut.
The parity world has evolved into a complex web of relationships between the main players: hotels; wholesalers; OTAs contracted with hotels; non-contracted OTAs; and metasearch engines. The main offenders are your bigger sites like GDS’s, HotelBeds, Agoda and most recently a local site which has changed its platform and is buying 3rd party rates – SafariNOW, which has turned into a metasearch site which crawls the internet to find the lowest possible rate.
All the bigger OTA sites are also now jumping on this wagon and buying these 3rd party rates to keep the consumers on their sites by offering lower rates. Some sites are cutting into their own commission profits in order to get that ‘sale’, they add ‘coupons’ and ‘early payment benefits’ to make sure they are offering the lowest guaranteed rate online.
Below there are a few examples on how these look –
This is how Agoda displays their coupons -
This is an example of Booking.com purchasing 3rd rates –
The bigger sites like Booking.com and Expedia help you find your parities in order for you (Or us the OTA Team at Proactive) to sort or pinpoint them. Examples are below, they even add the screenshot and link so that you can see where the disparity is.
So, the question still remains, how do we combat this?
Research shows that this margin cutting and 3rd parties selling rates are not going to be stopping any time soon, our advice is –
- Have strong legal binding contracts with your Online Sites, read all fine print and all T’s and C’s, these are lengthy and take up a lot of time, however, it will benefit you in the long run.
- Always monitor and check on Booking.com, Expedia and TripAdvisor to see which site is causing the disparity and contact them urgently.
- Make sure that you are offering the exact same price as well as specials on all sites.
- Be aware of what sites sell and push out reduced and lower rates.
We have a qualified and passionate OTA team who deals with these issues on a daily basis, should you feel ‘depressed’ by disparity, give them a call or drop them a mail – this all-woman team IS your solution.
Ending off, read your contracts and know your rights.
Written By The Proactive Team 2019