KEEP YOUR ROOMRATES IN CHECK

HOW TO F IGHT RATE DISPARITY

LEFT UNCHECKED,RATE DISPARITY CANSERIOUSLY IMPACTYOUR BOTTOM LINE.

Hotels often find themselves withlower rates on OTAs and other 3rdparty channels than they do on theirown website. That's not good!

What can hotels do?

THIS PRESENTATION WILL COVER:

1. The impact of rate disparity on your hotel'sbottom line

2. Causes of rate disparity3. How hotels can fight it & encourage direct

bookings

WHY DOES RATEDISPARITY

ACTUALLY MATTER?

C O M P A N Y . C O M

( A N D W H A T I S I T , A N Y W A Y ? )

Rate disparity,then, is whenwires getcrossed andrates are loweron OTAs thanyour site.

"Maintaining consistent rates for thesame product in all online distribution

channels, regardless of whatcommission the OTA makes."

It also applies to rates on your ownwebsite vs 3rd party sites.

RATE PARITY IS:

YOUWhen prices are lower

on OTAs, there's no

incentive to book direct

- and you're still paying

OTA commission rates.

It's a matter of trust: if

your site has a 'Best

Rate Guaranteed' or

similar, but it's cheaper

on an OTA, you might

lose their trust. You also

miss a valuable chance

to capture loyalty when

guests don't book direct.

OTAsTHE GUEST

W H O D O E S R A T E P A R I T Y M A T T E R T O ?

OTAs are mostly

protected from harmful

effects (i.e. a lower price

on your hotel website)

by contracts . When the

price is lower on their

site, they have an

advantage.

CAUSES OFRATEDISPARITY:

The number one cause?Administrative issues.

There are many channels your hotel isprobably active on, and third-partychannels have been known to changeprices based on factors like price andlocation, putting tremendous pressureon RMs to spend time they don't havemonitoring OTA prices.

Triptease's 2016 study, "OTAsUndercutting Hotels: A Billion DollarSinkhole" found that:

On average, a hotel website's price was undercut by anOTA 1 in 4 times

This undercutting is costing hotels over $1B annually indirect bookings

Despite this, direct prices were an average of $10.26cheaper across the board.

10 FACTORSTHAT CAUSERATEDISPARITY:

1. Promotions created directly with an OTA

Market Manager or through an OTA extranet,

meaning it's not available on the hotel website.

2. A property has an out-of-date rate code on an

OTA. Remember to close them!

3. The OTA has failed to change the rate they

were given, for technical or other reasons - this

may be across the board or only in certain

geographic regions.

4. The OTA is using a different current currency

conversion rate than your hotel.

5. The OTA has a base allocation, and you've sold

out all other rooms of that grade and below.

10 FACTORSTHAT CAUSERATEDISPARITY:

6. Your Channel Manager is tracking inventory

from your PMS, and the CRS is suffering latency

errors and showing inventory that's no longer

available.

7. The revenue manager might have linked the

wrong OTA rate from their CRS.

8. Your CRS doesn't support length of stay rates,

but they're used on the OTA.

9. Wholesale rates have been put on sale by the

OTA. Unless your hotel has specifically agreed,

you can insist on the rates being removed.

10. The OTA is using their commission to

discount the rate or is applying a lesser markup to

a net rate.

Human error often occurs, and it'scommon to forget to revise OTA rates

or accidentally leave old rates oncertain sites.

E S S E N T I A L L Y :

A channel manager is one way to solve rate parity issues.

Most of these problems, as you may have guessed, are easy to

resolve. The trick is staying on top of problems! Fortunately, there

are several technology providers that offer potential solutions for

monitoring and adjusting rates. All you need to do is figure out which

one is right for you.

NO HOTELS IN THESTUDY PRACTICEDFULL RATE PARITY.

RateGain's March 2016 studyanalysed rate parity by location.

Multiple other studies showed us similar results.

Dublin had 74% rate disparity; London had 87%. For Dublin,

on average, 23% had hotels offering better rates on OTAs,

and 51% were cheaper on OTA sites. In Venice, a shocking

97% of hotels were cheaper on OTAs.

HOW OFTENDOES RATEDISPARITY

REALLYHAPPEN?

HOW CAN HOTELS FIGHTRATE DISPARITY?

C O M P A N Y . C O M

A S I D E F R O M I N V E S T I N G I N A C H A N N E L M A N A G E R ,

I F Y O U ' R E O F F E R I N G A ' B E S T R A T E G U A R A N T E E ' O R S I M I L A RO N Y O U R O W N S I T E , W H I C H W E R E C O M M E N D , I T ' S V I T A L T O

F O L L O W T H R O U G H O N T H A T .

In most cases, OTA contracts demand rate parity. If that's the case,

follow the rules - but don't give OTAs a better price!

Invest in the technology to monitor and update your rates if OTAs

lower or raise them for certain times and locations. It's also important

to monitor your own rates to comply with your contracts.

If your contracts don't demand parity, offer a slightly lower rate on your

own site.

PUBLICLY AVAILABLERATES

C O M P A N Y . C O M

R A T E P A R I T Y G E N E R A L L Y A P P L I E S T O

T h a t m e a n s i f y o u h a v e a l o y a l t y c l u b , a d i s c o u n t g r o u p o r s i m i l a r , y o uc a n o f f e r t h e m b e t t e r r a t e s p r i v a t e l y : v i a e m a i l , a l o g i n s y s t e m o n y o u r

w e b s i t e o r o v e r t h e p h o n e .

W h a t c a n y o u d o f o r p u b l i c l y a v a i l a b l e r a t e s ?

O f f e r p e r k s !

F r e e w i f i , p a r k i n g o r d i s c o u n t e d t i c k e t s t o l o c a l e v e n t s a r e a l l g r e a t w a y st o m a k e y o u r s i t e ' s o f f e r i n g m o r e a p p e a l i n g t h a n a n O T A .

Correcting rate disparities costs you nothing but time in the short

term, and it can save you thousands in revenue.

When you overcome rate disparity issues, you encourage guests to

book direct, maintain control over your property and prices, and give

yourself the chance to capture more revenue.

T H E R E A R E M A N Y C R E A T I V E W A Y S T O M A N A G EY O U R R A T E S , B U T Y O U S H O U L D A L W A Y S H A V E

O N E E Y E O U T F O R R A T E D I S P A R I T I E S .

STAY ON TOP OFRATE DISPARITY

ISSUES TO GROWYOUR REVENUE

N E T A F F I N I T Y . C O M

Focused exclusively on the hotel sector, Net Affinityis a technology, digital marketing and web design

firm. We have collated the brightest, mostcommercially focused, experienced and passionate

team of online marketers, account managers,designers and developers whose combined skill set

ensures our clients' online success.