The long-awaited EU directive for hoteliers has arrived! The so-called rate parity has been removed. From now on, you can fully manage your stay rates and offer the best conditions exclusively on your own website. Learn how to use this change to generate even more revenue!
For many years, hoteliers have struggled to make their offers available through direct sales channels (such as the hotel's website) competitive compared to those offered by intermediary portals. To protect businesses, the EU created the Digital Markets Act (DMA). Until now, the list of so-called gatekeepers included giants like Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft. Recently, Booking.com from the OTA market has also been added to this group.
Below, you will learn how this regulation affects your business and the entire hotel industry operating in the European Union.
What are the Repercussions for OTAs and Other Gatekeepers?
With Booking.com added to the list of gatekeepers, it will be subject to stricter regulations imposed by the EU. From July 1, 2024, the intermediary will cease to enforce rate parity within the European Economic Area, This suspension covers not only the basic rate but also partner loyalty programs. This change restores control over rates and distribution to hotels, creating an excellent opportunity to develop direct sales channels on your own terms.
Apart from the OTA issues, hoteliers will also benefit from cooperation with the Google search engine, as better visibility of their own sales channels on this leading platform is expected.
What Does the Elimination of Rate Parity Offer?
The elimination of rate parity ensures greater control over managing rates in intermediary channels, allowing the most favourable prices to be offered on your own website. An intermediary portal cannot require you to apply the lowest room rate on their site as well.
How to Use the Changes in Your Hotel's Policy?
The abandonment of rate parity is an ideal opportunity to review whether your hotel is using all the tools that support the direct booking strategy. Together with the team of experts from the Profitroom Customer Success department, I have prepared a range of possibilities that you should implement to fully maximise the effects of the new EU directive.
1. Strategic Price Management
Be the price guardian in your own sales channel and ensure that guests always find the most attractive price here. Now your standard can be sending higher rates to OTA channels depending on the season and occupancy, e.g., +10%. With the capabilities of the Channel Manager, such a setting can be permanently applied to your pricing policy.
2. Cheapest Rooms Only on Your Website
To increase the competitiveness of your sales channel compared to intermediaries, keep the cheapest rooms available only on your website. Then, the Google search engine will indicate the hotel’s website as the one with the most favourable price offer. The Direct only function available in Restrictions 2.0 will be helpful here.
3. Discount for Newsletter Sign-Up
In the current situation, the function of a discount for providing an email address in the Profitroom Booking Engine 360 is gaining importance. The guest receives immediate gratification for booking here, and the hotel additionally expands its contact base. It is important that in addition to enabling the discount, you ensure that it makes the booking price more attractive than that obtained in OTA channels after activating all available discounts there.
4 Show Your Offer in Google Free Links
Show the most favourable price in all available places, and remember to verify offers shared in the Google Hotel Free Links channel. This article will guide you on how to do it.
5 Use the Price Checker Function
To credibly and visibly demonstrate the price advantage over OTA channels, consider using the Price Checker function offered by our partner, The Hotels Network. In one place, the guest can clearly see that booking here is the best option.
6 Actively Use Discount Codes
A good practice is to prepare a strategy for activities involving discount codes. Offers hidden only for a selected group of contacts from the mailing list? Newsletters with promotional campaigns where the code is valid only for a short time (thus pressing for a quick purchase decision)? You can already encourage guests to make direct bookings with these activities. Plan them carefully and in advance.
Mentioning discounts, it’s worth noting that you can create these for a selected offer combined with GHA and activate it only in this channel. This is another way to increase the competitiveness of the offer in the Google search engine.
7 Create Unique Stay Offers
Creating offers that are most likely to meet the needs of your guests is a way to gain direct bookings, not only by lowering prices. If your hotel is most frequently visited by families with children, providing animation, lunch soups, or additional room amenities will give an advantage over the "bed and breakfast" offered in intermediary channels. If the target group is couples, create packages with SPA treatments or romantic dinners. Added value to the booking can include:
- Flexible booking conditions
- Attractive check-in/check-out times
- Additional purchasable extras unavailable in intermediary channels
8 Use the Opportunity for Guest Loyalty
Encouraging guests to join a club allows for further tracking of their purchasing habits, enabling targeted campaigns and offering exactly what they are looking for, which they will find only directly on the hotel’s website.
9 Present Benefits Clearly
Guests are often unaware of the benefits of direct bookings. Focus on clear communication, maybe even with a touch of humour, as the goal is to capture their attention and finalise the reservation!
Implementing this directive offers a great chance to more effectively implement a direct booking strategy. Ensure that all of the above tips are implemented at your property.
Remember, we are here for you and offer advice based on experiences working with thousands of hotel brands worldwide. Feel free to contact the Customer Success team at team.cs@profitroom.com, read our Knowledge Base, other blog articles, or participate in events we organise.
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