Today's Revenue Management thought:-
Is rate disparity advantageous for hotels ?
Not maintaining rate parity on your distribution channels can be a disadvantageous situation for the following reasons:
Reduced profitability: When different OTAs offer different rates, customers tend to book through the cheaper OTA, resulting in reduced revenue for the hotel. This, in turn, reduces the hotel's profitability.
Brand value erosion: If a customer sees that the same room is available at different prices on different OTAs, they may perceive the hotel as lacking consistency and integrity. This can lead to a reduction in the hotel's brand value.
Confusion among customers: When customers see different rates for the same room on different OTAs, they may become confused about which rate to choose. This can result in them not booking the room at all or choosing a competitor's hotel instead.
Difficulty in forecasting demand: When different OTAs offer different rates for the same room, it can be difficult for hotels to forecast demand accurately. This can lead to overbooking or underbooking, resulting in loss of revenue.
In summary, rate disparity is not advantageous for hotels because it reduces profitability, erodes brand value, confuses customers, and makes it difficult to forecast demand accurately.
It is in the interest of hotels to ensure rate parity across all distribution channels in order to maintain consistency and integrity in their pricing strategy.
Have a profitable week.
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