“No to the equal tariffs imposed unilaterally by intermediary channels”: analysis of the second point of the HOTREC manifesto

OTA vs. Hotel

19 Jan “No to the equal tariffs imposed unilaterally by intermediary channels”: analysis of the second point of the HOTREC manifesto

The HOTREC manifesto (European trade association of hotels, restaurants & cafes) is a cornerstone for tourist establishments that want to reduce their dependence on large intermediation firms. The document lists the conditions on which relationships between hotels and intermediaries should be based, bringing decision making power back in the hands of accommodation establishments. In addition to rendering hotels more independent from OTAs, these “recommendations” aim to help you increase your direct sales.
Strategy.
Parity Rate.
Direct sales.

What are you waiting for to read it? n the meantime, we’ll continue with our analysis of the second point of the manifesto:

2. “No, to the parity rate imposed unilaterally by intermediation channels” (i.e. Expedia, Booking & Co.); hotel managers, publish the lowest rates and most advantageous sales conditions available on the Internet on your official website.

In other words, what does this all mean for me as a hotel manager?

It means that the parity rate is, in the majority of cases, annoyingly imposed on hotel managers by the OTA, leveraging its full strength as a large intermediary and threatening to terminate its agreement with the hotel, so that the hotel is placed in a position of inferiority.

The parity rate is the clause through which a hotel manager agrees to provide a given portal the same rates as on other online distribution channels. Hotel managers are free to formulate their own rates, however once communicated to an online travel agency (OTA), these rates must be the same for all channels used.

Seeing as the OTA does not possess the goods it resells, this clause should be conceded based on the hotel manager’s strategies, without being pressured by an intermediary. However, the Parity Rate always depends on the contractual rules agreed to between the hotel manager and intermediary.

But can I maintain the lowest and most advantageous rates for me while respecting the Parity Rate?

A variety of solutions are possible:
– use the promocode strategy on your website: a promotional code that provides a discount to travelers, formally maintaining the Parity Rate while offering a discount to the end consumer;

– offer accessory services the intermediary can’t propose. For example, customers making bookings directly on the official website can enjoy a free transfer, free entrance to the spa, a welcome drink, etc.

Do you have any other solutions or ways of dealing with this situation?

Nozio Business helps hotels balance their relationships with large OTAs, providing customized consulting tools.

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