Price parity! A real nonsense

Do you want to know a curious fact about price parity? At the beginning, it was an idea of hoteliers who, with the growth of the online channel in the 1990s, insisted on price parity to prevent OTAs from dumping direct hotel rates.

Currently, hoteliers are experiencing a turning point, since the regulation of OTAs in the main European countries, the clauses previously suggested by the hotels and now imposed by the distribution are being reviewed and may be abandoned (some countries such as France have already done so).

Now is a good time to prepare a pricing disparity strategy. Let’s do it!

  • Best price on the direct channel? Always! It is the most profitable channel and should be cherished. A simple decision that will encourage direct sales and create the prescribers of your hotel. A scenario that gains a new dimension and greater visibility with the possibility of reserving through the direct channel in the metasearch.​
  • Communicate attractively and consistently. Take advantage of the technology of your PMS/CRS to offer your agents the best price of your hotel. A unique tool for the whole organization that allows you to communicate with one voice the best price of your hotel.
  • Defend your hotel brand through digital marketing campaigns: pay-per-click, display, remarketing and metasearch. The idea is to be present in the digital world, in the same places where the OTAs promote publicity of your hotel.
  • Create value on your direct channel and give a unique experience to whoever books your hotel (OTAs do not). Everything is based on the motivation of the traveler and by now you should know the type of customer that is staying in your hotel … And their needs. Anticipate and create specific programs for your customers.
  • Sell your room types with discretion by using the product segmentation of the hotel, you can tell where you want to sell your rooms. Ideally the superior rooms can be marketed exclusively on your direct channel or an upsell strategy to the rooms sold in the distribution. They are effective ways to monetize the hotel’s revenue.
  • Best price in distribution? Perhaps! With the price of your hotel controlled and giving preference to the direct channel, the hotelier has a greater capacity of negotiation. Strategic partners can have the best price of your hotel, as long as it is advantageous and profitable. Abandon the idea of room nights and cultivate revpar.

And also, to keep in mind:

Revenue management’s best friend is without a shadow of a doubt, a profitable business mix. To achieve this, the pricing and the conditions negotiated with the various channels are key. In this logic, the same price under different agreed conditions for all partners is a nonsense. Benefit the most profitable partners, give clear prominence to your direct channel and be bold in your pricing strategy.

Irene

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