Hotel rate parity allows the hotels to maintain fair pricing across all the booking channels. For customers, it ensures that they are paying the best available price and for hoteliers, it simplifies their booking process and improves their image and reputation.
But when a customer finds that some booking agency is charging a lesser price than your actual price, it leads them to confusion and breaks their trust. It also decreases your revenue and weakens your control over pricing. This is one of the rate parity issues that shows how even a small variation in prices across various distribution channels leaves frustration to your guests and also creates revenue loss and damages your brand’s reputation.
In this article, let us see what are such 5 mistakes hotels make that break rate parity and how to fix them.
Top 5 Mistakes Hotels Make That Breaks Rate Parity
- OTAs and B2B Partners Resells Room To Third Parties:
One of the main mistakes hotels make is they might fail to check whether their prices are the same throughout different channels and as a result OTAs and B2B partners resell your rooms to third parties without letting you know. Sometimes, wholesalers sell rooms to non-contracted OTAs who set lower prices to differentiate themselves and attract more bookings. This is known as rate leakage which causes rate disparities and takes out your control over rate parity.
- A Diverse Distribution Strategy:
Hotels might depend on various OTAs, MetaSearch engines, and regional platforms for increased visibility. But when you use more channels it becomes harder to synchronize the prices. A diverse distribution leads to complicated channel management. More the distribution channels you work with, it becomes more challenging to manage them. This may affect your rate parity.
- Bait-and-switch Tactics On Metasearch Engines:
When a non-contracted OTAs charges a low price on MetaSearch engines, but then adds extra taxes or fees during bookings, it causes bait and switch. By the time the customer understands the real cost, they would have invested more amount and time in booking. It misleads your guests and minimizes the chances of direct booking chances.
- Affects Personalised Promotions
You cannot share your personalized promotion across multiple channels.
- Pushing Out Wholesale Rates:
When you support wholesale rights for your rooms, it may disturb the rate-parity.
How To Fix These Mistakes?
- Never Accept Channel Specific Promotions:
Don’t promote your offers and discounts via specific channels as it may lead to rate disparities and damage your relationship with your distribution channels. It is better to provide constant rates and benefits across all channels to ensure your transparency.
- Clarify Your Policies:
Be clear about your rate parity policies to all distribution partners. Understand the effects of rate disparities and try to maintain the consistent rates throughout. Keep reviewing and updating your policies and agreements with your distribution partners.
- Think of the Long-term Sales Strategy:
Rate parity should be your long-term sales strategy. Know the positive impacts of the rate parity on your brand reputation and bonding with your distribution partners.
- Advertise the Benefits of Direct Bookings:
Guide your guests about the benefits of direct bookings. Highlight advantages of direct bookings on your websites, social media platforms, and marketing campaigns.
- Reward Loyal Guests:
Incentivize your guests with rewards for booking directly. Offer discounts, rewards, room upgrades, etc., for repeated bookings or direct bookings. By doing so, you can encourage them to book directly and maintain rate parity and gain customer’s trust.
- Invest in your Website:
Let your hotel website be user-friendly, visually appealing, and optimized for direct booking. Invest in professional website design, mobile response, and fast loading time for improving user experience and to drive more direct bookings.
To better manage your room prices and keep an eye on what your competitors are charging, you can use helpful tools like RateGain. It makes sure your prices stay the same across all booking sites.
Conclusion
Though rate parity helps you maintain the same pricing throughout the multiple distribution channels, there are some instances when hotels may fail to follow the rate parity rules. This breaks the trust of your guests. But by fixing these mistakes you can regain your trust among your guests and also your distribution partners.
This article educates you about the top 5 mistakes hotels make that break rate parity.