Rate Parity – food for thought

With all the talk in the media about rate parity falling properties should be able to call the shots with their own pricing across channels whether they choose to present their product at parity or not and have the flexibility to offer the best rates/value on their own website.

However, from a revenue management perspective offering different rates across channels (to potentially the same transient segment) at the same point in time doesn’t make sense and just risks channel surfing and trade down. Unless the margin is negotiated so the lesser rate on the market yields a higher net to the property or the channels are niche.

RM is about offering different rates to different segments at different points in time based on demand.

Whilst also providing the opportunity to capture more direct traffic Metasearch has streamlined the process of searching for customers making comparisons across channels a lot easier.

In the current environment we have adopted work around methods to turn on and off less profitable channels. It is important to remember the customer is not privy to our margins and shutting of some channels at the hope of shifting the business to others (preferably direct) may work well for strong brands but can also be dangerous for smaller operators with less brand awareness. If your product isn’t where the customer is looking what business is going unseen?

There are many layers to this issue and it will be interesting to see how things continue to evolve.

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