Is Rate Parity Holding Your Hotel Back?

In the hotel business, many hoteliers face the Rate Parity issues, because of that, their hotels hold back, which is common practice in hotel Revenue Management, but the point is, have you observed how? Let’s understand

Hotels should instead consider a dynamic, data-driven approach to pricing and distribution, potentially adopting narrow parity or even moving away from wide parity to offer direct booking incentives and optimise revenue in the strong Saudi hospitality market.

How Rate Parity Can Be a Barrier for You?

A strict rate parity often prevents hotels from offering lower prices on their own brand websites to encourage guests to book direct, which is more profitable for the hotel.

You will see that if hotels fail to offer lower prices on their own brand website, then there would be a greater chance of losing guests who find better deals on OTAs.

Being tied to a rate parity policy makes it difficult to adjust prices dynamically in response to local events, demand or competitor actions. Here, some of the OTAs have the power to impose penalties, such as reduced visibility or terminate the agreements that you have signed with them, if a hotel violates their rate parity agreements.

Reduce the Rate Parity Impact on Hotels

You should not keep the same price everywhere. Instead, focus on keeping room prices within a small range on all OTA channels. With that, you need to offer perks like complimentary breakfast, meals, free upgrades or loyalty programs to your guests who are booking directly through your own website, even if the price is the same or a bit higher.

Here, you need a channel manager who will help you manage your entire room rates across all distribution channels more efficiently and they will ensure that you are not undercut.

The use of the Precium Automated Competitor Rate Shopping & Rate Parity Check analytics tool will help you to better understand the market trends and guest behaviuor in Saudi Arabia to set dynamic pricing that will help to maximises the hotel’s revenue.

Also, you need to differentiate your offers by providing unique amenities or guest experiences that justify hotel room rates, rather than solely focusing on price. And then you need to audit OTA prices on a regular basis and then you will find your direct rates discrepancies, if any and then easily ensure you are not losing out.

The hospitality market in Saudi Arabia is experiencing significant expansion, but also holding back. So, as the market grows, hotels need to find ways to stand out and capture market share with the Precium Automated Competitor Rate Shopping & Rate Parity Check Tool, which helps to strategies pricing decisions more effectively than traditional rate parity. Schedule your free demo today and keep your hotels ahead.