Rate Parity as a Revenue Management Tool

rate_parity_for_hotelsThe objective of rate parity in hotels is to encourage consumers to book direct. They should not find any advantage of booking via a third party website over making a reservation on your own hotel website. Learn in this weeks article how to get organized and use rate parity as a hotel revenue management tool.

In order to implement rate parity properly in a hotel, and truly have the same price over all your distribution channels, you need to log and configure the taxes and margins of the 3rd party websites correctly.


Too often we still see hotels making calculation mistakes. Simple math is at the basis of this. And of course we need to know what the difference is between margin and mark-up. This occasionally still is a challenge.

Make an excel table with all the conditions of each portal, include;
  • Tax % (included / excluded)
  • Net / commissionable
  • Margin % / fees
  • Cancelation policies
  • Payment policies
  • Free sale / allotment
  • Release
It will help you better understand your hotel distribution mix.

Next step is to configure your channel management system with the correct margin and taxes so you can easily load the same sell rate for each extranet.

hotel_rate_parity
As surely you work with more than one room type per online travel agency website, you now have to configure a differential, variable per room type. For instance, set the difference between your superior room and deluxe room to €40.00. This way you will save time of rate loading a price for each single room type, and will only have to submit the BAR for one room type and your channel manager will update the rest.

rate_parity_in_hotels
As you can see, implementin rate parity in a hotel is quite easy. You just need to get organized. Having a channel management system surely helps.
 


Having the same rates on all public distribution channels will stimulate for more consumers to book directly with your hotel.

One final important question remains, can they find easily your website?

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