• Hotel Parity Probe and what it could mean for Hotels

    Lorna McNamara, Marketing Director

    There have been some recent developments in the Rate Parity Probe with both two of the largest OTA’s Booking.com and Expedia agreeing to allow other agencies the right to offer reductions for hotel rates. More information on this can be read in the tnooz blog.

    Rate Parity and its impact on hotel online revenue has been discussed a lot on hotel industry blogs over the last year. In one of our recent blogs on Rate Parity Double Standards, we  looked at double standards practiced by the OTA’s. However, with more pressure being placed on OTA’s by the Office of Fair Trading and other bodies, and with the agreement from Booking.com and Expedia to allow freer pricing, this will mean that hotels will be able to promote discounts or promotional rates more freely on their own site. Hotels will be able to do this without the contractual hold placed on them by the main OTA’s.

    These changes don’t necessarily mean that OTA’s won’t continue to dominate the online hotel market, but it should allow more flexibility for hotels to sell the best price on their own site. It will also mean that the smaller OTA’s have room to become creative in how they promote, and perhaps gain some market share. However, a rate parity clause in a contract meant that the rates on the main OTA’s and on a hotel’s own site were the same. With the removal of those type of clauses, closer inspection will have to be made concerning what rates each online distribution company can offer for a hotel, including the level of discounts to ensure that hotel’s make the most of the opportunity to offer the best available rate on their own sites.

     

    Tuesday, August 13, 2013