TACKLING THE DIRTIEST OF HOTEL PHRASES:‘ RATE PARITY’
BY MARK ELLIS OF WELCOME SYSTEMS LTD
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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.
www. welcome-systems. uk