The discussion around the pros and cons of rate parity has been around for almost a decade now. Regulations on the issue are, at best, patchy, with some countries where RP clauses are strictly prohibited (such as France, Austria, Italy, and Belgium), partially prohibited (Germany and Sweden), announced (Switzerland), or still unregulated (US and Latin America). With lower volumes of booking coming from OTAs during the pandemic, moreover, the debate about rate parity became even more heated: some properties decided to work in wide rate parity to avoid OTAs' dimming and improve their online visibility at the expenses of direct revenue, while other ones preferred to openly break rate parity on their top-performing channels. Both the OTAs and major hotel brands complicated the issue even further when they began offering out of parity “member only” rates, hidden behind an easily obtained loyalty program password. With so many different approaches and fragmented regulations, how should hotels deal with rate parity, especially after the whole industry has been severely hit by COVID-19?

Trevor Stuart-Hill
Trevor Stuart-Hill
Founder and president of Revenue Matters

Be careful what you wish for! It's important to remember that it was hoteliers, not the OTA's, that insisted on incorporating rate parity clauses in OTA contracts in the first place. 

While appealing at first blush, for hoteliers, the elimination of rate parity would undoubtedly mean increases associated with marketing and advertising budgets, increased investment in CRM technologies. It would require operators to beef up call center support.  Even worse for consumers, elimination of rate parity will contribute to marketplace confusion - placing additional burdens on them during the shopping and booking (and rebooking) process.

I wrote an article on this topic two years ago... https://revenuematters.com/rate-parity-is-dead-whats-next-for-hoteliers/ .  It's interesting that we are still faced with the same challenges today. 

View all 16 views in this viewpoint