Delving into Rate Parity and What it Can Do for You

When starting your own hotel, it is difficult to grasp the jargon that needs to be understood to effectively bring your business to its full potential. Even when setting up your website, you need to be familiar with the term SEO to ensure that your website is compatible to allow your website to be featured in the high rankings of Google and other search engines.

Rate parity is when a hotel room is priced at the same rate across a multitude of sites. This came into effect when online travel agencies, or OTA’s, became a more popular way to book a hotel room online and rate parity stops these sites from undercutting each other to try and get the better deal. It gives the customers comfort in knowing that, no matter who they book with, the price that they are paying will not be beaten and they are getting the best deal possible.

Online booking engines  are incredibly useful to hotels; hotels need beds filled and the booking engines can deliver just that. However, OTA’s take money from the hotel as payment for their services and it has been ingrained into consumers that the only way to find a deal is to search OTA’s; this means that directly booking with a hotel is fast becoming a thing of the past. With rate parity, the hotel cannot compete with OTA’s, it cannot lower its price further and thus give its own website the edge. Even though they do fill the rooms, hoteliers are now coming up with ways to offer loyal customers better rates without splashing their cash on commission.

Quite simply, as a hotelier you will have to work with rate parity, however, there are some strategies you can put in place to allow you to attract commission free and direct bookings to your hotel. Using a closed user groups allows the hotel and OTA to promote special offers to a group; this will usually be those who are already registered with the OTAs and use them to gain rewards by being members of hotels. This will make the strengthen the appeal to book directly through your hotel but it will also give discounts to those who are loyal who may have been offered a full price stay through your hotel website.

Offering a bundled incentive that competes with the price of an OTA is a sure-fire way of gaining new custom directly to your website. A free breakfast, parking or wifi for the duration of their stay is a great way to bring bookings right to your website. Just make sure that the outgoings will be less than the commission going out to ensure that it is worth it.

It may seem simple but you tend to find that the most simplest solutions are the most effective. Having a uncluttered website can make all the difference to potential guests. Having to wade through a load of advertisements, pop-ups and information can be tedious and so having a website that is clean, simple and concise can bring a multitude of customers to your site. Something so simple can help you reduce your commission costs significantly.

Did you like this? Share it:
Responses are currently closed, but you can trackback from your own site.

Comments are closed.