TACKLING THE DIRTIEST OF HOTEL PHRASES : ‘ RATE PARITY ’
BY MARK ELLIS OF WELCOME SYSTEMS LTD
N
o , no - come back , please . I know you ’ re fed up of reading about rate parity and tired of the commission bills that continue to drop into your inbox , but this subject simply isn ’ t going anywhere . That means one thing : time to tackle it head on .
Which online travel agencies ( OTAs ) should you work with ? What are you allowed to do with your room rates when distributing availability via these different sites ? Can you offer a better deal on your own website ’ s online booking system ? How do guests really shop for rooms ?
WHO BENEFITS FROM RATE PARITY ? There ’ s no doubting that guests benefit from rate parity . If they ’ re assured of the best rate no matter where they find your property online , it saves them time hunting around and provides peace of mind that they ’ re getting a good deal .
OTAs benefit too , because they can reliably inform guests that they won ’ t find a better price elsewhere - and that means a greater chance of a commissionable sale .
The hotelier ? Well , on one hand - not so much ; margins take a greater hit if they ’ re unable to increase prices to take account of commissions . But on the other hand , they ’ re still likely to receive the booking if the guest gets hooked in by the OTA ( and , as we all know , the all-important task from that point onwards is to ensure the customer enjoys a great stay and books directly for their next visit ).
OTAs continue to provide increased visibility for hotels online . They have massive marketing budgets and , as such , can do most of the leg work for the hotelier , thus justifying their commission fee . A sold bed is a sold bed , after all .
HOW TO TACKLE RATE PARITY Firstly - make sure you comply . Love them or hate them , you need your OTAs , and it isn ’ t worth turning off a valuable source of new bookings simply because you don ’ t agree with the rules . They ’ re highly unlikely to change , so you just need to be strategic in the way you deal with them .
HERE ARE THREE GREAT WAYS TO AVOID PAYING TOO HEAVILY FOR RATE PARITY :
1 ) Package up ! Although you ’ re expected to offer the same room pricing across all websites , there ’ s nothing stopping you from offering better packages via your own website . If your hotel booking system allows it , create room rates that include more than just a bed and breakfast ; include free , unfettered access to WiFi and a cut-price dinner if they book direct . 2 ) Create a loyalty club . It ’ s worth checking the terms of your OTA contract , but it is generally accepted that you can offer lower rates to a limited audience . You could do this by creating a loyalty club , Facebook group or some other official gathering that guests can join and benefit from lower rates in return . 3 ) Tool up your TripAdvisor listing . TripAdvisor is a brilliant tool for dampening rate parity woes . By using their TripConnect Instant Booking feature , your own website can sit alongside the OTAs on your listing as a method for booking . You ’ ll pay for the privilege , but it is based on a cost-perclick model that will usually be far cheaper than OTA commission .
Rate parity shouldn ’ t dominate your thoughts . Sure - there ’ s no harm in having a grumble about it ( we all have ), but once you ’ ve accepted it ’ s probably here for the long run , it ’ s time to roll up your sleeves and put the hard work into tempting guests to book direct .
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