Hotels,Think You're Cut Out For Doing Rate Parity in 2018?

By Bhanu Chopra CEO, RateGain | April 22, 2018

Rate Parity the most puzzling word in hospitality industry is a cause of stress for many hoteliers; first primarily because of the very fact that a third agency is involved in deciding the price of your own property even on your own website. Secondly, it restricts hotel's free pricing strategy, putting many restrictions on them. Not only this, even penalties for not adhering to them.

The concept of Rate Parity was introduced with the basic objective of protecting the integrity of hotel room rates across different online platforms and offering the guest a consistent experience of booking across all channels with respect to pricing. However, unfortunately things moved beyond this and under Rate Parity Agreements OTAs started restricting hotels from undercutting OTAs and offering discounted rates even on their own websites.

Popularity of OTAs with in the traveller community restricts hotels from un-listing their inventory from the popular OTA channels. OTAs after all have become a very important instrument in the entire online booking process because a major percentage of bookings done online come from OTAs.

Hence, hoteliers are left with no option, but to figure out ways to ensure that these restrictions and agreements under Rate Parity clause do not eat their hard-earned profits.

Few very common techniques to ensure you get a major chunk from your revenue is to get maximum direct bookings. Smart hoteliers use few tips to ensure this. These are shared below:

  • Make your brand website booking friendly
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The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.