World Panel
Viewpoint20 May 2019

Is Rate Leakage a problem for hotels?

Digital Marketing in Hospitality

— 7 experts shared their view

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This viewpoint was created by
Max Starkov, Adjunct Professor NYU Tisch Center for Hospitality and Hospitality & Online Travel Tech Consultant
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Charlie Osmondsupplier view
Co-Founder & Chief Tease at Triptease

The awesome rise of Google's meta and the launch of Booking.basic, make rate leakage the #1 challenge for hoteliers in 2019 and 2020 - and certainly the most requested topic at the Direct Booking Summit this year.

There is no escaping the cost of undercutting today - our data suggests direct bookings drop 30% when hotels are undercut. The sad news is that the future looks worse not better. Rate leakage is a growing problem for most hotels (by volume and % discount) and the impact of each leak is also getting worse.

What to do? Dynamic rates are a start but not a full solution. Test bookings fight the symptom and not the cause. Contracting and closeouts can be highly effective, but as with everything, it's the focus, intensity and energy that a hotelier brings to the problem that determines success or failure. 

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