Hotel parity report - UK by OTA Insight

Hotel Parity Report
United Kingdom 2018

Hotel Parity Report United Kingdom 2018
Research and feedback across OTA Insight’s partners increasingly
indicate that disparity - the difference between quoted prices on
hotels’ own websites and those shown by online travel agents (OTAs)
and other third-party channels - is a big headache for the vast majority of
revenue managers.
At OTA insight, we have been conducting an ongoing survey on the
current state of parity where key early findings have already shown that
more than half of hotel professionals still don’t feel in control of their
parity. This raises some questions on how parity is perceived amongst
hoteliers and where they feel they should be versus where they currently
stand.
Another key finding relates to the primary reasons hoteliers are giving
for managing parity efficiently. For some, revenue management is the
main driver; for others, it's reputation protection. But across the board,
hoteliers agree that parity affects both the bottom line and brand
reputation. This central finding underlines their desire to improve their
parity management processes.
In this report, we will provide a full breakdown on parity in the United
Kingdom and the key trends that are affecting the market. To find
our more about rate parity, read our eBook: Hotel rate parity -
understanding and meeting the challenges.
Introduction
1

2
OTA Insight works directly with hotels all around the world on a daily
basis to help identify, fix and manage rate parity issues across all
leading OTAs and metasearch sites.
In line with our mission to help the hospitality industry visualise and
leverage data, we have produced the first ever Hotel Parity Report
for the United Kingdom. This will provide more transparency to the
market, so all hoteliers can take away actionable insights on parity and
how it affects them and their properties.
As we are launching this report at WTM 2018 in London, we have also
analysed data on the United Kingdom's performance in isolation.
As parity issues continue to be a daily challenge for hoteliers, the Hotel
Parity Report provides a benchmark for hoteliers to understand parity
performance in different markets.
This Hotel Parity Report examines the UK's rate parity trends for 2018
and provides visibility into the differences between Major Chains
(based on 10 of the leading global hotel chains within the hospitality
market), Independents and Local Chains (a range of independent
properties and local market chain hotels).
What is the purpose of the Hotel Parity Report?
• Our overview of parity performance
(Click here)
• The range of rate disparity between OTAs
and brand.com
(Click here)
• Distribution flow
(Click here)
• Where loss issues are coming from
(Click here)
• Key findings
(Click here)
Find out more about
Win - Percentage of arrival dates where the lowest priced
channel is more expensive than brand.com
Meet - Percentage of arrival dates where the lowest priced
channel is equal to brand.com
Loss - Percentage of arrival dates where the lowest priced
channel is cheaper than brand.com

Parity performance overview
We compared hotel brand.com rates versus OTA rates. Shops
were classified as Win, Meet, Loss when rates on brand.com were
respectively Lower, Equal to or Higher than the lowest OTA rate.
UNITED KINGDOM
Major Chains
45% of OTA rates were more competitive than brand.com (Loss)
Independents and Local Chains
Whereas in Independents and Local Chains, 53% of the time, OTA rates
were more competitive than brand.com (Loss)
3
KEYNOTE
Parity loss is a key issue not only across Independents and Local Chains (53%
of the time) but also within Major Chains, where parity loss is a big concern (45%
of the time), even with significant investments in direct booking campaigns,
technology and platforms.
Hotel Pairty Report: United Kingdom 2018
© 2018 OTA Insight. All Rights Reserved.
MAJOR CHAINS
INDEPENDENTS AND LOCAL CHAINS

Where there were rate disparities between OTAs and brand.com, we measured the ranges within which rates varied either as a loss or a win
UNITED KINGDOM
Major Chains
4
WIN
In 44% of all wins brand.com was priced 5-15% lower than OTA
rates.
UNITED KINGDOM RATE WIN RANGE
MAJOR CHAINS
LOSS
Across Major Chains, 68% of all losses occur when OTAs were
priced 5-20% lower than brand.com rates.
UNITED KINGDOM RATE LOSS RANGE
MAJOR CHAINS
Rate disparity range between OTAs and brand.com

5
UNITED KINGDOM
Independents and Local Chains
WIN
50% of all wins are within the range of 5-15%. In these cases,
brand.com prices are lower than OTA rates.
UNITED KINGDOM RATE WIN RANGE
LOSS
In 61% of all losses, OTAs were priced 5-20% lower than brand.com
rates.
UNITED KINGDOM RATE LOSS RANGE

6
Distribution Flow
There is an increasing number of paths to purchase for
customers for a single hotel room, as illustrated by this
diagram.
With the growth in metasearch as a research channel there
has also been an influx of smaller, non-contracted OTAs with
discounted rates surfacing due to price comparison websites
giving these smaller players a platform to promote on a global
scale.
Many of these rates are being sourced at a heavy discount via
wholesalers, bed banks and consolidators and onsold to OTAs,
where they are promoted at prices which are never meant to
be available to the public directly. (For more details read our
latest eBook on parity)
So where does it go wrong?
Caching, property-level OTA / wholesale promotions, technical issues, or human error?

7
To answer this question we looked into the channels where disparate
rates were sold on.
From the tracked OTAs we broke down the 20 channels that most
frequently offered more competitive rates than brand.com in the United
Kingdom, based on the percentage of time each OTA was tracked to be
out of parity.
Top-line parity figures have stayed more or less the same, suggesting a
consistency in rate parity issues.
However, the exact channels are visibly more dynamic. This change is
due to fluctuations in mark-ups of non-contracted OTAs on wholesale
inventory, on which hotels have less power to change or act, sometimes
due to caching issues or property-level OTA/ wholesale promotions,
technical issues or human error.
• Caching - issues involved with expired rates appearing online to
prospective customers
• Property level OTA/ wholesale promotions - (un) intended hotel
level contracts or promotions with OTAs/wholesalers which allow for
additional discounts or (unbundled) onward distribution
• Technical issues - caused by technical malfunctions of software or
outdated connectivity
• Human error - when rates are not loaded correctly
Where are loss issues coming from?
Common causes

UNITED KINGDOM
DISTRIBUTION CHANNEL PERFORMANCE
MAJOR CHAINS
UNITED KINGDOM
DISTRIBUTION CHANNEL PERFORMANCE
8
In the United Kingdom
non-major OTAs are the major
source of parity loss.
Amoma appears consistently near
the top of the list across both Major
Chains, and Independents and
Local Chains.
LOSS LOSS

There is huge volatility across different OTAs,
particularly the smaller ones.
With so many online distribution channels, it is important to
note not only the high prevalence of
non-contracted OTAs, but the fact that although there is
change in OTAs causing these loss issues, the overall market
loss percentage remains constant. This means the issues are
not down to single OTAs but to bigger, market-wide issues,
which are ongoing concerns.
9

Key Findings
• OTAs are more likely to be in parity with Major Chains than
Independents and Local Chains. Market-wide, there are significant
parity loss issues with Independents and Local Chains facing losses
53% of tracked shops in comparison to 45% for Major Chains.
• A significant majority of parity loss from OTAs was from rates
displayed 5-20% lower than brand.com rates.
• Issues coming primarily from non-contracted OTAs being out of
parity, Agoda and Alpharoom are the most common offenders in the
United Kingdom for Local Chains and Independents and Major Chains
respectively.
10

Methodology
11
The research was undertaken by the Market Data Insights team at
OTA Insight – an international team of researchers and analysts
focused on extracting hotel market trends.
The online market survey gathered OTA Insight data from the most
recent quarter (Q2 2018), across 140 countries and more than 28,000
hotels globally on brand.com, OTAs and metasearch sites. For this
specific report, the United Kingdom’s market data has been analysed.
Analysis for this Hotel Parity Report - United Kingdom was conducted
on a cross-section of Major Chains (based on 10 of the leading global
hotel chains within the hospitality market), Independent and Local
Chain Hotels (a range of independent properties and local market
chain hotels) across the United Kingdom’s market.
Detailed analysis of the results was performed to better understand
the different trends and behaviours between Major Chains, and
Independents and Local Chains, particularly regarding pricing
performance and parity.
For all the data points presented in the report, a range of brand.com,
OTAs and metasearch sites were shopped weekly across a range of
arrival dates. For each arrival date, the lowest rate detected across any
of the non-brand.com channels was compared with the lowest rate
on brand.com. Based on the comparison of the two rates, the arrival
dates were categorised as either a Win, Meet or Loss. All shops were
compared based on lowest public rates only (excluding members
rates), for a single-night booking for two people.

This report has been prepared for the purpose of providing insights to understand the different trends and pricing behaviours between OTAs and
the UK's Chains, Independents and Local Chains’ websites, particularly regarding pricing strategy and rate parity.
With the launch of this first report, we aim to mark the start of the next era in development for OTA Insight to complement and support our
range of market-leading revenue management tools. By providing market-level data intelligence we aim to provide the industry with smarter,
actionable insights that helps drive more profitable decisions.
Thank you for your interest.
© OTA Insight 2018
OTA Insight at a glance
OTA Insight empowers hoteliers to make smarter revenue and distribution decisions through its market-leading suite of cloud-based business intelligence solutions
including Rate Insight, Parity Insight and Revenue Insight. With live updates, 24/7 support from our customer success team, and a highly-intuitive and customisable
dashboard, the OTA Insight platform integrates with other industry tools including hotel property management systems, leading revenue management systems
and data benchmarking providers. OTA Insight's team of international experts are based all over the world, including the UK, US, France, Germany, Belgium, Spain,
Italy, Brazil, Mexico, Singapore, Australia and India, and supports over 30,000 properties in 140 countries. Ranked one of 10 “Ones to Watch” in The Sunday Times
Tech Track 100, OTA Insight is widely recognised as a leader in hospitality business intelligence.
For more information, visit www.otainsight.com and follow us on Twitter @otainsight.

Hotel parity report - UK by OTA Insight

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