Offering differentiated hotel pricing based on the geographic location of guests brings us to a timeless question: Can business practices be both profitable and ethical, or is that just a comforting fairy tale for capitalists with a conscience?
This is not the first attempt for an ill-conceived differentiated pricing by the OTAs. 15 years ago Orbitz was caught jacking up prices for Apple computer and laptop users under the presumption that Apple users were more affluent than PC users.
This research is indeed intriguing. As a product manager for Lighthouse's parity management solution, I've seen firsthand how hotels use extranet promotions to offer location-specific and platform-specific discounts. However, this study reveals a fundamentally different scenario.
Why not? There are many across industry examples where location and socio-demographics impact pricing for products and services. A few brief examples - Fuel - Drive around your own town and you will find vast differences. Not to mention long weekends.
Value hotel chain, easyHotel has further strengthened its financial position by securing a £24.5 million loan from Spanish Bank, CaixaBank to support its continued expansion into the Spanish market.
What could be safer than a Swiss bank? This article takes a deep dive into what Swiss authorities are doing to restore confidence in the country’s banking system. As discussed in a previous article, the Public Liquidity Backstop (PLB) is a measure implemented by the Swiss government to insulate the country’s banking system from a run on its systemically-important banks. Designed prior to the involuntary merger between Credit Suisse and UBS, the PLB will, at long last, go into effect in 2025. Yet, the measure could have unintended consequences that need to be fully considered. So how did Credit Suisse (CS) collapse in the first place?
In my view, last-minute discounting is a super lazy and rookie approach to revenue management and a sure downward spiral to hotel insolvency. One question: why airlines and car rental companies never engage in last-minute discounting?
No actions that drive business to OTAs away from direct channels are good for hotels. It's a simple concept. OTAs have been very creative in finding ways to train the consumer to choose their booking channels over hotels' own websites and this is just another attempt to do the same.
Last-minute discounting is a double-edged sword for hoteliers. It can help fill unsold inventory, but it also carries significant risks that can undermine a hotel's broader revenue strategy and brand perception. From a revenue perspective, unsold rooms are a perishable asset, and this type of policy can be useful to sell those rooms.
On March 16, 2023, the Federal Council of Switzerland declared an emergency order introducing the Public Liquidity Backstop (PLB)1. In doing so, the Swiss National Bank (SNB) granted a CHF 100 billion loan to Credit Suisse (federal default guaranteed)2. In September of the same year, the Federal Council also presented its (provisional) draft bill concerning the PLB for banks of systemic importance3.
OTAs typically have the better booking experience, greater reach thanks to infinitely higher marketing spend, and if they also have the better price thanks to member rates, mobile exclusive discounts, package rates, etc., why would anyone still book direct?
I believe rate parity is essential for transparency and trust with our guests. It ensures consistent rates across all third-party channels, avoiding confusion and maintaining our brand's reputation. While we have the flexibility to offer special rates on our own website (a channel we fully own), rate parity helps us manage distribution more effectively with OTAs and other third parties we don't fully control (which we don't own).
I believe that hotels should have the freedom to set different rates across their distribution channels, including OTAs, without being bound by rate parity agreements. Firstly, allowing hotels to set their own rates enables them to respond more dynamically to market conditions and tailor pricing strategies to different customer segments.
Rate parity is non-sense and the RTI ( Retun time invested.) is always negative. here is why: 1. Hotels cannot answer how much additional business they got because of disparity - so easy to throw rocks as to how much money "might have been lost" vs 2.
Spanish hotel transactions exceeded €1.6Bn in H1 2024, involving 56 properties and over 8,100 rooms. This is about a 3% increase compared to H1 2023 and 56% above the 5-year average (2019-2023). The Balearics, Barcelona, and Madrid were the most active hotel investment markets, supported by healthy operating results. Elevated investment activity is expected going forward, likely exceeding €3.0Bn by the end of 2024.
Scandic has carried out a refinancing of the company’s credit facilities with a group of banks that will ensure robust, flexible and long-term financing adapted to the Group’s growth strategy and strong financial position.
I don't think this is a good move from Booking.com as indeed advance purchase rates (with no refunds or cancellations) have been a useful tool to attract budget-conscious guests and ensure steady cash flow for hotels. Nowadays, guests are even more price sensitive so by removing completely prepaid rates at a discount, we (they) may lose some customers directly.
In some ways it appers much like the old model of travel agent relationships and vouchers, where the hotel received the funds from the agent after the guest had stayed and submitted their voucher for payment through the accounts receivable process.
Hotel advanced booking/pre-paid rates are typically 10%-20% below BAR (Best Available Rate). These rates have always been an important strategy to put as much business on the books and to decrease cancellation rates plaguing the industry for years, reaching as high as 50% in some destinations.
We're looking at the finger and not at the moon. As the EC focuses on writing norms, the web for which these norms are written no longer exists. We are witnessing an evolution towards what I like to call a post-search era. AI assistants (be they conversational tools such as ChatGPT/Claude or physical devices such as Rabbit's R1) will one day become the primary (if not the only) interfaces for web access. These models could evolve into primary aggregators and distributors of information, particularly in over-fragmented industries such as ours.
I wrote about this topic exactly 5 years ago (see Rate Parity Is Dead - What's Next for Hoteliers)
I believe this is a positive step towards fair competition and gives hotels the freedom to create better pricing strategies overall. Savvy hoteliers will definitely drive stronger performance thanks to this, for the others this won't change much :) Now, let's not always blame the OTA for everything, if we really look at the NetRevPAR per channel, most hotels will be surprised to see that the NetRevPAR of the OTA is sometimes the highest one!
Great subject to discuss. The industry for too long has been a slave to parity agreements, and now the EC has created some breathing room for hoteliers to develop their own strategies as it relates to OTA's. It was almost like the tail was wagging the dog from a digital strategy and pricing perspective.
Good. High time. Most customers are price driven and want to get the best quality product at the best price. Where else should that be found, but with the producer directly? Put simply, there is no environment where it should be acceptable that the producer and provider of a product is forced to offer the same price to a third party that does not produce the product, and expects to profit from the same.
I do not anticipate the complete demise of human Revenue strategists any time soon. The day to day activities of a revenue manager may change and many entry-level positions will be eliminated. How this trend of not creating a pipeline of new Revenue Leaders is going to impact the industry 10-20 years from now, is material for another discussion.
Interesting question, and just like we do with our Forecasts... I'll try to guess what will happen in the future.
Six years ago I attended the Revenue Forum in Brussels. It was my very first industry event. I remember the potential threat posed by Business Intelligence to Revenue Managers was a hot topic. Back then Revenue Managers spent a fair share of their time manually compiling data from various sources into a single, giant, Excel sheet that could be analysised for optimisation. As BI solutions became more widespread, some revenue managers feared that their roles would become redundant. If they weren't going to be the masters of the giant Excel, what were they going to do?
It depends. Smaller less complex hotels will be the first ones where there is no need for a revenue manager. Pricing and Inventory Management can be indeed fully automated. The role of a revenue manager already has evolved / needs to evolve to focus more on-demand generation.
Currently, doing research on the topic and most of the experts I talked to indeed think that the position of Revenue Manager will disappear in the next 5 years (replaced by AI tools and/or integrated with other hotel functions such as Commercial).
First thing I've done - of course- is ask Chat GPT. AI itself "believes" that it will not fully replace humans as It can not match human insight and intuition or adaptability to crisis scenarios, neither has interpersonal and leadership skills.
A major expansion and renovation project, in excess of £80 million, has begun at the multi-award-winning Belfry Hotel & Resort in the West Midlands. The impressive project, due for completion Autumn 2025, will see a flagship 852sqm event space, The Masters Suite, built and designed to host 648 guests for banqueting with a max capacity of 920, making it perfect for conferences and product launches, mini expos and weddings.
Travelodge OpCo Group, the UK’s first budget hotel brand which operates nearly 600 hotels, today announces the completion of the property acquisition as anticipated in the announcement of the agreement on 8 January 2024.