Price parity, a utopia?

We live in a time of such competition in the hotel sector that each reservation is 'fought' with intermediation, right? There are many channels to control so that there are no disparities and also many variables: markets, nights of stay, devices and even time slot or day of the week in which the reservation is made...

What is clear is that beyond getting the reservation, disparities produce a series of negative consequences for your hotel and your brand:

Disparities reduce the number of direct bookings since others compete against you with better rates for the same product, which let's not forget is yours. Consequently, they produce lower profitability for the hotel. Disparities can also bring a type of client that is not of interest to your hotel (who comes 'only' for price and then does not consume other products or services).

Another point, no less important, is that being intermediated clients, it is difficult to work on your loyalty program and generate a relationship with them.

Prevention is better than cure

Having a clear and well-defined distribution strategy will facilitate parity control. Our advice:

●  Review contracts with new distributors and try to include binding price clauses that set consequences in the event of non-compliance.

●  Less is more. Having many open channels does not mean selling more or that they are going to bring us more customers. You should focus on those channels that offer profitability and that, for example, offer payment at the hotel, in order to control the final price.

●  Don't compete against yourself. In some cases, you may be offering rooms through various channels for the same target audience. This usually coincides with channels whose business model for sales is the generation of disparities, so we do not increase sales but lose control of our distribution.

●  Focus your distribution strategy on direct sales. Offering better conditions on your rates or guaranteed exclusive rates will help the user end up booking directly. You can offer direct discounts with promocodes, add free meal plans, include improvements in the conditions of the reservation...etc.

Can you control disparities?

Technology is always an aid, saving time, facilitating reports with valuable data and avoiding errors. All revenue needs a good 'Rate shopper' as a work tool. 

If you still don't consider hiring a tool to do it, you can control disparities manually, with a lot of patience and even having to make reservations with your own card to identify the source of these. In any case, you have other tools that you can use such as Metasearch engines.

Thanks to the connectivity and reach of metasearch engines, you will be able to detect disparities that your distributors may be carrying out. Keep in mind that there are many factors that will influence the rates shown and you may have to do the searches at different times of the day, with a different number of guests, number of nights or even changing the search engine domain to other countries to identify the prices that are shown in other markets.

Communicate it firmly and if they persist, act. When you have identified the disparity, take screenshots and communicate it to the distribution channel that is responsible for the disparity. If the problem persists, you will only have one weapon left, apply a surcharge to that channel or even temporarily close sales to that channel. 

And if you can't control parity, turn the situation around!

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Generate positive disparities towards your direct channel. How?

• Exclusive rates and additional values: always reserve the most attractive promos and offers for your direct channel. (Ex: Early check in, Late check out, free SPA, etc.)
• Protect your inventory: you should always reserve a part for your direct channel and even offer exclusive rooms that no other distributor or OTA has.
• Loyalty: use your own program as OTAs do. Our engine not only makes it possible to offer discounts to registered customers, but also allows you to segment them by levels with different advantages or discounts that will help you create that engagement and optimize your profitability (not all the advantages must be price reduction).
• Better rates in metasearch engines: thanks to the direct integration we have with the large metasearch engines (Google HA, Tripadvisor, trivago...) you can send different discounts or supplements for your direct channel to customers who consult your hotel in metas, in this way you can be more competitive vs OTAs in these channels.
• Opaque discounts: OTAs are increasingly aggressive with their “opaque” strategies such as discounts by mobile device, promocodes, discounts by time slots, etc. You can also work all these functionalities in your direct channel thanks to our booking engine.
• Payment flexibility. An increasingly important factor for customers is when and how they pay for their reservation. Facilitating this through flexible and exclusive payment policies on your direct channel can be a differentiating factor (payment upon arrival, semi-flexible rates, interest-free installment payments...) or even alternative payment methods (PayPal, Bizum, etc.) thanks to our ePayments Manager product.
• Offer hyper-personalization:

            - With Hotelverse and our integration with its digital twin, you can offer a value proposition that OTAs cannot replicate.

            - With THN (The Hotels Network) and its Price Match tool, you can offer personalized discounts based on the origin of the user's search to create positive parity for your direct channel and ensure they complete their booking.

Remember, as the saying goes, 'If you can't beat them, join them!'. If disparities are a headache for you, define a good distribution strategy and then get ahead of other channels and generate positive disparities in your direct channel.