While the rate parity in hotel industry guarantees that you have complete control over setting the benchmark for your room rates and assures that prices are the same across all distribution channels, it also makes you lose a significant chunk of potential revenue as huge commissions to the OTAs.
The hospitality sector has reacted inconsistently to rate parity, with OTAs and hotels holding opposing views. Several nations, notably the USA, France, Italy, and Germany, have already begun to take steps to either limit or totally eliminate rate parity.
In spite of the advancements that appear to limit your property’s potential for growth and profit, a greater awareness of these changes will assist you to comprehend how you can stay one step ahead of your rivals. Let’s look at some advice to help you overcome roadblocks on your path to generating revenue and develop the best rate parity hotels approach.
Get Ready For A World Without Rate Parity
In a perfect society, everyone would act fairly and abide by rate parity hotels agreements. We do not, however, live in such a world, which is why there are hotel rate parity issues and the ongoing process of tracing who reduced our rates.
Although OTAs generate a lot of cash for you, they also come with a lot of limitations and severe, unyielding parity requirements. Your income management and maximisation approach will become much more flexible and provide you plenty of space to experiment if these rules are removed. As a result, you won’t need to keep track of the prices that your partners and OTAs are offering at any given moment. You can compete in a market that is susceptible to abrupt price fluctuations that may be determined by the dynamics of supply and demand rather than by agreements that may not always be advantageous.
Improve Your Hotel Brand Website
There is a reason why online travel agencies (OTAs) are so well-liked; travellers frequently use them as their primary source when making online reservations. This is due to the fact that in addition to marketing initiatives, they have also made investments in a user-friendly interface to develop a brand identity and brand image. They have made care to offer users an effective user experience, which includes quick page loads, frequent updates, prominent call-to-action buttons, and a reliable online booking engine.
A website with all the aforementioned components is a formula for a direct booking engine and revenue-maximizing machinery. Once this happens, you can utilise your website to generate a steady flow of direct bookings and save money on the commissions you would otherwise have to pay to online travel agencies, which might be as high as 20% or more! You not only increase your earnings but also have the chance to introduce the visitor to your brand and other helpful details like deals, bundles, and discounts that they might be interested in.
OTAs Are Your Friends In Need
Even though OTAs frequently demand exorbitant commissions, they are a potent tool for not just generating cash but also promoting brands. The ability to rank your hotel’s listing higher in the databases of your chosen OTAs will help you get more visitors and guests, particularly during the off-season. Given the prevalence of OTAs, it would be foolish to rely entirely on direct website reservations to provide revenue because there is little chance that direct bookings will increase during the shoulder season. Even in difficult times, OTA listings may make your hotel stand out.
Prioritize Balance In Online Distribution
We’ve talked about how essential OTAs are to hotels. How many of them do you need, though, is an important question that needs an answer. According to conventional thinking, the hotel rate parity issues will be more evenly distributed the more distribution channels there are. However, controlling abrupt price changes will be a problem if there are no rate parity hotels. Therefore, it is wise to concentrate primarily on the distribution channels that are effective and provide you with more profitable bookings in the current environment. Practice yield management, which means that the channels with the highest costs and profits will be chosen.
However, keep in mind that OTAs are not completely absent just because there is no rate parity in hotel industry. They have a significant impact on the market dynamics of room distribution and reservations and have a well-established name in the sector. As a result, as long as an ideal balance is kept, OTAs, meta-search engines, and direct bookings are all various mediums of distribution that can live fruitfully in your hospitality ecosystem.
In conclusion, hotels should make an investment in a progressive Rate Parity solution given the current circumstances. A comprehensive technology that enables hotels to not only pinpoint the root of rate parity in hotel industry but also provide them with a full-service fix. A platform that can offer perceptions of the entire enterprise-level parity, an evaluation of the performance of all the hotel chains, real-time buzz, and the opportunity to engage with the troubled hotel chain and take control of the situation with real-time tracking. To get all of this and so much more, connect with RateGain now.
