Rate Parity: How it affects your hotel business?


Rate parity means that “consistent prices need to be maintained for a product in all the online platforms.”


Likewise, hotel rate parity means “consistent prices need to be maintained for your hotel rooms in all the OTA channels and also in your hotel website.”

Rate parity is a consensus signed by hotels when they partner with OTAs to offer rooms with the same prices on their hotel website.


The challenges


The problem is hotels need to give commissions for each booking they receive from a distribution channel. The commission may vary from channel to channel.


This really poses a big threat to hoteliers and affects the bottom line. Even hotels cannot undercut rates on their hotel website to attract guests and more bookings.


OTAs have higher online visibility than hotels. Hotels not utilizing their properties on these channels might receive lower bookings.


Overcome Rate Parity Issues


Hotels still need to depend on OTAs to enhance visibility. At the same time, they need to increase direct bookings. How can hotels achieve more direct bookings?


  1. Market your value- OTAs are the connecting platform between hotels and guests. Hotels can outrank OTAs by actually showcasing their values and the experience they offer to guests. Highlight perks like free Wi-Fi, shuttle services or other unique selling points to drive more direct bookings.
  2. Direct Marketing- Utilize social platforms like Facebook, Twitter, and other Q&A platforms like Quora to promote exclusive offers for your followers. Also, use email marketing to promote offers and drive direct bookings.


Further Readings: How hotels can make effective use of Facebook

Why do hoteliers need Quora?

How to set up your hotel ad in Quora?


  1. Metasearch Site- Metasearch sites are another ideal platform for hotels to drive commission-free bookings with less cost. Hotels can run pay-per-click campaigns to get visible among your potential guests, drive them to your site, and make them book direct.


Further Readings: Metasearch Engine: A simple method to increase your hotel's direct sale!


  1. Deliver better user experience on your site- Guests are more likely to book their stay on OTAs because of its user experience. Deliver a seamless booking experience. Therefore, make your site load faster, easy to navigate and user-friendly.


With these practices, hotels can reduce the dependency over OTAs, drive relevant traffic to their sites, and increase direct bookings.