otas , with their billion-dollar marketing budgets , still Hold tHe keys to distribution .

Rate parity agreements are disintegrating before our eyes . The increase of mobile has led to a broad spectrum of rates and smart hoteliers are segmenting loyal customers to offer personalized rates . The trend is stronger after parity agreements were banned in parts of Europe .

A post-parity world could benefit third parties more than hoteliers . Rate parity agreements were created because of the rampant price undercutting by OTAs following the 2001 downturn . In theory , this should be great news for hoteliers who will hold the pricing power . But OTAs , with their billion-dollar marketing budgets , still hold the keys to distribution . If hoteliers try to push higher rates through OTAs and play favorites , it is possible — and quite likely — the OTAs will flex their distribution muscle . They control which hotels show up on the first pages of searches and which appear on the third page .

During a Priceline earnings call , CEO Darren Huston explained : “ We will never charge our customers more ... we have so much innovation we could do to make sure our customers don ’ t get shown prices that are uncompetitive .”

The industry needs its biggest players to step up , reconsider last room availability and set the negotiating tone . In the meantime , hoteliers should ensure they have control over pricing across all channels independently and in real time .

A study by the University of Maryland Smith School of Business Center for Service Excellence and sponsored by the AHLA Consumer Innovation Forum , outlines the travel consumer ’ s booking path , or “ click-stream ,” shows the dramatic changes in booking behavior over the past five years . Early findings indicate that a majority of consumers who begin shopping on an OTA do not leave that OTA to book on a brand . com website .

The concept of modeling online consumer behavior will continue to increase in importance in the travel industry as margins are squeezed further through intermediation and market forces . Marketing departments will be forced to evaluate the value of each dollar they spend and make difficult decisions as to where to allocate those funds . The days of a hotel being “ on every shelf ” are over . It is simply too expensive .

Regardless of whether this behavior truly existed in the past , the data from this study shows that the majority of users , in addition to using the OTAs as research tools , are simply completing their bookings on these sites as well . The proportion of consumers using OTAs as their exclusive travel booking tool has also increased . Further evidence from the study indicates that there are far more visits to airline sites prior to a hotel booking than there are OTA visits .

Hotels Have to make tradeoffs so they can acquire customers in a cost effective manner .

Patrick Bosworth , DUETTO , San Francisco

Matt Carrier , KALIBRI LABS , Potomoc , Maryland