Strategies to Combat the Impact of Disparities

Managing rates in the hotel industry constantly grapples with the challenge of disparities. These can negatively impact your brand perception and, of course, your hotel's revenue. 

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Below João Rodrigues, Direct Channel Specialist of our team in Portugal, presents effective strategies to help you fight disparities and maintain consistency in your rates. 

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GENERAL STRATEGIES TO COMBAT DISPARITIES

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Controlling your pricing starts at the source. The prices you set for each channel, the margins you allocate, and the channels you choose significantly influence the volume of disparities compared to your direct channel.

One of the relationships to keep in mind is that the more channels you have, the more disparities you are going to have because they use their margins to sell in other channels (even among themselves) and it is more difficult to have control of the customer's final price.

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IMPACT OF DISPARITIES ON DIRECT CHANNEL RESULTS

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The volume of disparities you have will determine how often your direct channel doesn't offer the best price. This, in turn, influences customers who compare prices on your Direct Channel and other platforms, negatively affecting your results. 

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IMPACT OF DISPARITIES ON MARKETING CHANNELS ROI

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At Roiback we recommend to all our clients to invest in digital marketing channels such as Google Ads and meta search engines so that they can always be present where their customers are looking for them and thus increase the volume of qualified visits to the web. 

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This effort must align with controlling disparities because if we invest to increase qualified website traffic without ensuring the best price, the Return on Investment (ROI) will be significantly lower. This is because customers will end up booking through other channels.

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STRATEGIES TO COMBAT DISPARITIES ACROSS THE BOARD

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To help hotels like yours combat disparities, we recommend various actions for the long, medium, and short term. 

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Long-term: It's essential to have a Rate Structure that benefits the direct channel, with exclusive discounts and well-controlled sales margins for other channels.

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Medium-term: Focus on two critical annual actions:  

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• 1. Analyse your most profitable channels and review those contributing to the majority of your revenue (between 80 and 90%). This allows the remaining channels to serve as growth margins for your direct channel, replacing marginally beneficial channels with ones that offer real profit to your hotel. 
• 2. Develop an Annual Campaign Plan with promotional actions. Sales campaigns such as Black Friday, January Sale, and Valentine's Day can be utilised as needed, preventing you from being reactive or harmed by offers from tour operators and OTAs. 

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Short-term: To have an immediate impact, we recommend creating positive disparities (benefiting the direct channel) and featuring a Best Price Guarantee badge on your website.

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Both serve to pass the message to your potential customers that the direct channel has the best price guaranteed and in cases where it does not, the hotel can match or lower the amount that a customer identifies. In this sense, the customer himself sends you the place where he has seen the rate, which allows you to satisfy his request, build loyalty and, on the other hand, act immediately in the face of this disparity. 

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HOW ROIBACK CAN HELP

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At Roiback, we offer several products to help you identify and combat disparities. 

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In our platform MetaBase Pro platform, we give you the data of each of the MetaBase search engines concerning the frequency in which only you have the best price(Beat) or the same as an OTA(Meet) or when you don't have it(Lose). Thus, you will be able to monitor in Metabase the percentage of these 3 indicators and perceive at all times how your disparities are.

We also have a partnership with The Hotels Network. With them you can have, at a preferential cost for Roiback customers, access to their Price Match price comparator; a tool that allows you to match in real time the prices of other OTAs directly on your website without the customer having to go elsewhere to compare prices. 

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At a strategic level and so that you can always benefit from having more attractive prices for your customers, we recommend that you run campaigns with discounts for your Loyalty Program.We also recommend that you consider having an exclusive rate for members only visible to those who register in your program. 

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In conclusion, defining the strategy you want to implement is crucial. First, identify the channels with the highest revenue and profitability, focusing on the continuous growth of the direct channel. With the help of monitoring tools and an Annual Campaign Plan, you can boost your direct sales and increase your hotel's overall sales volume while optimising acquisition costs.

At Roiback, we can assist you with strategic planning to implementing tactical actions to put your direct channel first. 

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Contact us! We’d be delighted to advise you.

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