Rate disparity, if left unchecked, can seriously impact your hotel’s bottom line. Hotels often find themselves with lower rates on OTAs and other third party channels than they do on their own website – that’s not good! So what can hotels do? This presentation will cover: 1. The impact of rate disparity on your hotel’s bottom line 2, Causes of rate disparity 3. How hotels can combat rate disparity and encourage direct bookings Let’s get started.

1. KEEP YOUR ROOM
RATES IN CHECK
HOW TO FIGHT RATE DISPARITY

2. LEFT UNCHECKED,
RATE DISPARITY CAN
SERIOUSLY IMPACT
YOUR BOTTOM LINE.
Hotels often find themselves with
lower rates on OTAs and other 3rd
party channels than they do on their
own website. That's not good!
What can hotels do?

3. THIS PRESENTATION
WILL COVER:
1. The impact of rate disparity on your hotel's
bottom line
2. Causes of rate disparity
3. How hotels can fight it & encourage direct
bookings

4. WHY DOES RATE
DISPARITY
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 ? )

5. Rate disparity,
then, is when
wires get
crossed and
rates are lower
on OTAs than
your site.
"Maintaining consistent rates for the
same product in all online distribution
channels, regardless of what
commission the OTA makes."
It also applies to rates on your own
website vs 3rd party sites.
RATE PARITY IS:

6. YOU
When 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.

7. CAUSES OF
RATE
DISPARITY:
The number one cause?
Administrative issues.
There are many channels your hotel is
probably active on, and third-party
channels have been known to change
prices based on factors like price and
location, putting tremendous pressure
on RMs to spend time they don't have
monitoring OTA prices.

8. Triptease's 2016 study, "OTAs
Undercutting Hotels: A Billion Dollar
Sinkhole" found that:
On average, a hotel website's price was undercut by an
OTA 1 in 4 times
This undercutting is costing hotels over $1B annually in
direct bookings
Despite this, direct prices were an average of $10.26
cheaper across the board.

9. 10 FACTORS
THAT CAUSE
RATE
DISPARITY:
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. 10 FACTORS
THAT CAUSE
RATE
DISPARITY:
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.

11. Human error often occurs, and it's
common to forget to revise OTA rates
or accidentally leave old rates on
certain sites.
E S S E N T I A L L Y :

12. 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.

13. NO HOTELS IN THE
STUDY PRACTICED
FULL RATE PARITY.
RateGain's March 2016 study
analysed 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 OFTEN
DOES RATE
DISPARITY
REALLY
HAPPEN?

14. HOW CAN HOTELS FIGHT
RATE 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 R
O 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 .

15. 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.

16. PUBLICLY AVAILABLE
RATES
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
That means if you have a loyalty club, a discount group or similar, you
can offer them better rates privately: via email, a login system on your
website or over the phone.
What can you do for publicly available rates?
Offer perks!
Free wifi, parking or discounted tickets to local events are all great ways
to make your site's offering more appealing than an OTA.

17. 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 E
Y 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 .

18. STAY ON TOP OF
RATE DISPARITY
ISSUES TO GROW
YOUR REVENUE
N E T A F F I N I T Y . C O M

19. Focused exclusively on the hotel sector, Net Affinity
is a technology, digital marketing and web design
firm. We have collated the brightest, most
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