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The Reign of RATE PARITY.

All Online Travel Agents (OTA) have been asking for years to have a rate parity between the hotel rate available on the web with direct booking and the OTA rate.

Rate Parity : Media by WiX
Rate Parity : Media by WiX

For many years we used to apply the rate parity as we really needed to grow our direct booking business and because the simple system to open a hotel on OTA was quite easy to apply; Just provide proof of ownership and hope…


we can upload photos (photo quality is key), rates, and text, and then a few days later you may be able to check your property is on the OTA web with a commission of 17 to 22 % for the duration of the stay.


It is true that 20 years ago, with the Tour Operators for the resort, it was a nightmare, paying some 25% from low rate as commission, plus always some contribution of pages (large hotel could have 2 pages x $ 5000), plus some free room nights during high season for journalists or any.


Finally, the OTA is cheaper than Tour Operators but the most important is the speed, you can expect an OTA online within a few days when you are waiting 6 months to 1 year for a tour operator. That makes the difference.


So, in 2023 how to manage your rate on OTA, Can the systems (Siteminder, Cloudbeds, Rate tiger, Broadandlink, etc) provide a proper channel manager for all your bookings? Hopefully yes. You have an history but your history is based on 2 or 3 horrible years during Covid-19 time. So, your personal implication becomes urgent, don’t trust your channel manager as it is very theoretical and find for you the best rate according to past…not to future and not to present.


My suggestion is to ask your team to evaluate a calendar of activities, per week, per month, per year to see how high you can go, how much you can sell your property according to demand, according to new airlines arriving at the destination, and according to the result of your competitor. This is a hard job, not only looking at one time thing but thinking out of the box, a few weeks in advance knowing the instability of the world could also affect your hotel business.


To come back to RATE PARITY, it is time to have a deeper action, your rate has been fixed following the paragraph above, and now you want to get more direct than OTA. Of course, your priorities are

1) Having a super website with super photos and text in Multilanguage

2) Having a booking engine from the web to get more quick reservations with an online payment.


But it will be not enough as the OTA is multi-powerful and has the proper tools to guide the customers from Google to their own OTA website. The online payment via credit card is crucial, it may cost a bit but the direct booking is directly in your pocket.



Once the payment is confirmed, the web attractive and your calendar updated, to measure your audience and get particular bookings to your own web, will depend of the extra bonus you may provide to customers:

1) Free upgrade to the next room category

2) Free breakfast

3) Free pick up at the airport

4) Etc


These are certainly the best ways and don’t touch your revenue, a bit on cost but manageable if you compare to the 20% you pay to the OTA for each night.


The OTA are very strong on the market, most countries now have access to the internet with an average of 80% of the people having internet access around the developed world, knowing the fastest internet remains in Singapore and the slowest remains in Afghanistan and Yemen.


The job of controlling the data should be done with prime attention, a 10$ difference could be a direct profit of $ 1000 a day if you work with OTA at a high degree, depending on the type of hotels you manage. To increase from $1000 to $ 1500, it will be time to talk about the Upselling programs, any property should be able to propose it.

 




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