Rate parity refers to the practice of maintaining consistent pricing for a hotel's rooms across all distribution channels, including the hotel's own website, online travel agencies (OTAs), and other third-party booking platforms. It is important for hotels to maintain rate parity because it helps to create a level playing field for all channels and avoids price undercutting, which can lead to confusion among consumers and damage the hotel's brand.
By maintaining rate parity, hotels can ensure that the prices for their rooms are the same across all channels, which reduces the likelihood that a potential guest will book through an OTA rather than the hotel's own website. This, in turn, helps the hotel to retain control over its pricing strategy and revenue management and to increase its profit margins by reducing commission costs.
Additionally, maintaining rate parity helps hotels to build trust with their guests. If a guest sees that the hotel is offering the same rate across all channels, they are more likely to view the hotel as a reliable and trustworthy provider of accommodations. This can help to build loyalty and encourage repeat business, which is essential for the long-term success of a hotel.
Here are some steps hotels can take to maintain rate parity:
- Monitor pricing: Hotels should regularly monitor their own rates as well as the rates of their competitors and OTAs to ensure they are in line and ideally best value and rate is always bookable via direct channels.
- Use a channel manager: A channel manager can help hotels to manage rates and availability across all channels in real-time, reducing the risk of rate disparities. Profitroom’s own Channel Manager enables efficient management of cross-channel online sales and includes unique tools like flexible occupancy rate management and allows for bulk updates of prices and restrictions.
- If you are participating in any OTA member schemes (Genius) for additional exposure, it is worth matching this discount on your own booking engine. You can do this in Packages & Rate Plans - Newsletter Discounts. Newsletter discount functionality has directly contributed to 95 000 reservations and over 35mln Euros in revenue.
- Google's business card serves as an excellent illustration of the importance of maintaining consistency across all distribution channels. In addition, leveraging this tool can potentially give you a competitive edge over OTAs, ultimately boosting traffic to your hotel and driving up conversion rates. We can distribute your prices to Google via Google Hotel Ads in their free links, this is a free way to get more traffic to your direct website.
- Direct booking incentives - Offer value-added services: you can offer value-added services such as:
- Free breakfast
- Free welcome drink / bottle of wine
- Upgraded room
- Late Checkout and Early check in
- Packages - adding packages is a great way to differentiate your offering from the OTAs. Profitroom allows you to create content rich packages which can easily be linked to your website, email and social media.
- Abandoned Cart functionality allows customers to return quickly to where they left off and also for us to send them email reminders of searches they have made. 64% of our hotel partner’s guests abandon their booking after adding it to their cart via the hotel’s website. Convert these lookers into bookers by throwing in an attractive discount or catching them with a nice extra added during their stay. Profitroom hotel partners generated 10% from all monthly bookings thanks to abandoned cart recovery.
- Discounts - We also have discounting tools that can help you attract new customers to your website, by offering:
If you decide to opt into an OTA promotion in the low season you should look to replicate this on the Booking Engine.
For more information on how to maintain rate parity or to find out more about our suite of solutions that can help you do this, please reach out to book a demo with us today!